Nearly half (40%) of 18-30 year olds consider their knowledge of pensions to be poor or very poor and three in five (60%) don’t know what a workplace pension is according to research by workplace pensions provider NOW: Pensions.
Two in five (42%) justified their pensions ignorance by saying retirement was a long way off. Around one in four (27%) said they find pensions too complex. And nearly three quarters (71%) said they find pension terminology and jargon a barrier to engaging with the subject.
Alarmingly, despite anyone over the age of 22 earning at least £10,000 a year being auto enrolled into a workplace pension, over half (58%) of 18-30 year olds admitted they still don’t know what auto enrolment is.
Morten Nilsson, CEO of NOW: Pensions said:
This pensions blind spot amongst younger people should be raising a warning flag for the Government and industry. Auto enrolment is going to bring thousands of younger people into workplace pension saving, but if their understanding is poor, there’s a real risk that the policy will be undermined. The industry needs to work harder to eradicate jargon, making pensions more understandable for young people so the benefits are better understood.”
In contrast to their lack of pensions knowledge, only 13% and 19% respectively said they have a poor understanding of savings and credit cards. The only financial services product that young people feel they have less understanding of than pensions, was investments, where 43% said they have a poor or very poor understanding.
Article by Andrew Pring; first appeared in The Actuary Magazine October 2016
Petaurum Solutions’ Comment
Complying with complex Auto Enrolment obligations can be a daunting prospect for many business owners and MDs and this research from NOW: Pensions shows it is no less daunting for the younger members of the workforce who are being asked to invest for their futures. Workforce engagement is a critical element of choosing and implementing your qualifying workplace pension scheme and it is important to consider this when choosing your provider. Providing the pension scheme is a given, but can they help you with the processing requirements and responsibilities that Auto Enrolment can bring as well as the implementation, communication and engagement plans that will help ensure its success.
Contact us to find out how we can help.
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