Almost half (48%) of working adults have no confidence in pensions, compared to other ways of saving, according to a survey by the National Association of Pension Funds (NAPF).
Its Pensions confidence index, which polled 896 employees in the UK, found that 42% of respondents are confident. However, this was the first dip into negative confidence in the index’s four-year history.
The survey also found that 58% are not confident that their pension will give them enough money to live on in retirement, while 33% are.
Additional findings from the survey include:
- 28% of respondents still rate a pension as the most important benefit, though this was a clear fall from 41% in 2010
- 26% chose flexible working as the best perk, up from 17% in 2010
- 35% said a pension is the best way to save for retirement, down from 44% in 2010
- 15% named individual savings accounts (Isas) as the best way to save for retirement, up from 12% in 2010
Joanne Segars, chief executive at the NAPF, said: “Confidence in pensions has slumped at a time when it needs to be growing.
“It is worrying that from next year millions of people will be auto-enrolled into a savings vehicle they have so little faith in.
“Politicians have to boost confidence in pensions, or people will simply opt out. We need a pension framework that the public can believe in and rely on.
“We urge the government to do more to fulfil its own pledge to reinvigorate pensions. It must get on with reforming the state pension by setting a simpler, single-tier system. This would set a clear foundation for retirement on which people can build their workplace pension and savings.
“The economic downturn has eroded faith in pensions, and the recent sharp stock market falls have also put many people off. Household incomes are very tightly squeezed and, with bills to pay, pension outlays can seem like the weakest link.
“There is also a perception that the goalposts are constantly being moved, so the government must stress the importance of saving.”
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