NEWS


One in five ‘not bothering’ with their pensions at all


By Sophia Imeson


Survey finds more than a third of savers do not know how to access their pension pots, with many believing that their pension contributions are a total ‘waste of money’


E


xperts have stressed the need for financial education after recent research found that more than a third of savers do


not know howto access their pension pots and one in five people are “not bothering” with their pensions at all. Results from a survey of more


than 2,000 people in the UK, carried out by Expert Pension Claims – which deals with mis-sold pension and investment complaints – paint a worrying picture of people’s understanding when it comes to retirement savings. Of those surveyed, 37 per cent said they do not know howto access their pension pot. Twenty-four per cent of male


respondents said they believe their pension contributions are a total “waste of money”, compared with 16.4 per cent of women. But more than a quarter of women think that pensions will not exist by the time they reach retirement. Nearly 19 per cent of people are


“not bothering” with their pensions because they do not think there is any point. Moreover, only 27 per cent of 21 to 30-year-olds know howmuch money they and their employer are putting into their pension pots each month. The research also revealed several


pension concerns, with almost half of the survey respondents (47.6 per cent) worrying they will not have enough money to last them through retirement. One in four people were concerned that they will die before they can drawtheir pension. Caroline Anstee, a pensions expert


and independent financial adviser, argued that financial education is the


One-fifth see contributions as a waste of money


Respondents asked whether they agree with the statement that their pension contributions are a total ‘waste of money’


Somewhat agree Strongly agree Male


Neither agree nor disagree


Strongly disagree Somewhat disagree


N/A


0 510 15 20 25 30 %


Source: Expert Pension Claims


OF THOSE SURVEYED, 47.6 PER CENT SAY THEY WILL NOT HAVE ENOUGH MONEY TO LAST THEM THROUGH RETIREMENT


key to allaying savers’ concerns and helping themplan for the future. “If more financial education was


available then everybody would understand more and therefore not worry as much,” she said. Darren Laverty, partner and financial wellbeing strategist at Secondsight, agreed that increased financial education would help resolve some of these issues. “These are shocking and worrying statistics. Our business has educated and advised tens of thousands of employees about their pensions over the past 14 years and I cannot think of a single individual who after that process thought that pensions were a ‘waste of money’,” he said. According to Mr Laverty, themost effective type of financial education


‘sold’ on the idea they are much more receptive to


the technical information Darren Laverty, Secondsight


Once the employee is Female Total


“is one that focuses on anemployee’s motivation at retirement first and then the provision of technical pensions information second”. He argued that an employer’s role


should be to educate with a focus on why someone should save rather than to provide the saver with lots of technical information. “Once the employee is ‘sold’ on the


idea they are much more receptive to the technical information,” he said, adding that “the industry tends to deliver the technical info before people have actually made the emotional decision to save”. Statistics published by Portafina


lastmonth showed that 92 per cent of people aged 18-24 think they would be better off financially if their school had provided financial education, and nearly half of school- leavers wish they had been taught about pensions. Mr Laverty said pupils “need


persuading that short,medium and long-term saving is a good idea and hopefully these lessons will lead to giving thema better financial life”. Jamie Smith-Thompson,managing


director of Portafina, also stressed the need for more financial education froma younger age: “This is something schools could really help with, and it could have a massive impact on the financial future of our country, especially with pension poverty.” He highlighted that pensions are


the most powerful savings toolmost people will ever have. “The fact that half of Brits fear they won’t have enough money to survive on after finishing work, or thatmany people think pensions are a waste ofmoney, is deeply worrying,” he said. He said it is important tomake


pensions simpler to understand and access. “This is down to us as an industry, which includes regulatory bodies and the government. Financial matters are hard enough to engage with, for many reasons, without people being faced by pages of jargon, complex technicalities and a myriad of changing rules.”


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