Lack of understanding leads to lack of pensions saving

Half (50%) of respondents believe the main reason people do not save in pension schemes is because they do not know what retirement income their pension will give them, according to research by pensions and benefits consultancy Hymans Robertson.

The research, which surveyed 101 UK employers, also found that:

  • 90% of respondents said that they would like to see a defined contribution (DC) pension scheme that gives employees greater certainty about the pension they will receive.
  • 62% of respondents would be prepared to put in place a system that would help secure a target retirement income for employees without having to contribute more to the scheme.
  • 80% of respondents believe that increasing pension contributions in line with wage increases is a good idea.

Lee Hollingworth (pictured), head of DC consulting at Hymans Robertson, said: “The government should focus on improving DC provision in developing the defined ambition agenda. 

“The question the Department for Work and Pensions should be asking is how to make DC work better as opposed to trying to reinvigorate defined benefit pensions, particularly given its investment in auto-enrolment.”