More than a third (38%) of respondents aged under 40 years old or aged 40 and over who have not yet retired believe that a workplace pension scheme is the safest way to save for retirement in the period July 2016-December 2016, according to research by the Office for National Statistics (ONS).
Its Early indicator estimates from the wealth and assets survey also found that 68% of respondents who have not yet retired cite an occupational or personal pension as an expected source of retirement income between July 2016 and December 2016. This compares to 62% in July 2014 to June 2016.
The research also found:
- 20% of respondents feel that workplace pension schemes are the retirement saving method that will make the most of their money in July 2016-December 2016, compared to 49% who cite property as the saving vehicle that will make the most of their money.
- 15% of respondents aged under 60 years old who are not in receipt of a pension and are not currently contributing to a pension say they do not contribute to a pension because they do not know enough about pensions between July 2016 and December 2016. Other reasons for not saving into a pension include low income, they are not working or they are still in education (55%), and not being able to afford to contribute into a pension (29%).
- 84% of employee respondents aged over 22 but under the state pension age are aware of automatic enrolment in July 2016-December 2016.
- 18% of respondents aged 16 and over report that their decisions on pensions, savings and investments had been influenced by something in the wider world, for example the EU referendum, in July 2016-December 2016. This compares to 15% in July 2014 to June 2016.
- 32% of respondents aged under 40 or aged over 40 but not yet retired have thought about how many years of retirement they might need to fund in July 2016-December 2016, compared to 16% of respondents aged 16 to 24 years old. Of the respondents who have thought about how many years of retirement they might need to fund, 37% expect to be retired for between 20 and 24 years in July 2016-December 2016.
- 54% of male respondents under 65 years old and female respondents under 60 years old are fairly or very confident that their income in retirement will provide the standard of living that they hope for in July 2016 to December 2016.
- 59% of respondents currently in work or those who are not retired but intend to work in the future expect to retire between 65 and 69 years old in July 2016 to December 2016.
Nathan Long, senior pension analyst at Hargreaves Lansdown, said: “Confusion with pension planning is worryingly on the rise. Investing in property is seen as the best way of making the most of your money despite it being one of the least tax-efficient ways to invest. More people are now citing a lack of understanding as the reason why they are not in their workplace pension, even though auto-enrolment means most will not make any decisions whatsoever to join.
“The tail end of the retirement journey also is starting to show signs of people expecting to work longer, but with more than a quarter of older people not properly planning their retirement the reality could be even more severe. As people live longer and the cost of social care rises, the likelihood of inheritances acting as an additional income in retirement falls.”