How much pensions’ awareness do you have?
A combination of a lack of financial education and poor access to pensions information may leave employees seriously unprepared for retirement, according to a new survey.
The research found that 10% of 18 to 24-year-old employees did not know what a pension was or how it worked, and female employees were less aware of employer pensions than their male counterparts.
The survey included more than 2,000 adults and almost 80% of the female respondents, admitted to being unaware of their pension’s value. A quarter of those aged 55 and over who work, do not understand how a pension works. The survey also revealed a gap in financial understanding and expectations of retirement earnings. Almost half of workers who hoped to retire believed their standard of living would drop in retirement. More than a third of workers, however, felt it would remain the same on retirement, and 39% of 18 to 24-year-olds specifically believed there would be no decrease in living standards when they retired.
More than half of employees with a pension were unaware of the amount they paid into it, and around a third said they had never checked their pension status. More than half of all employees surveyed said they would like to retire in their 60s, whereas 40% said they thought they would actually retire at that point.
The government announced in December 2017 that by the mid-2020s, employees aged 18 or over would be able to save into a workplace pension, rather than the current age of 22, aiming to bring another 900,000 people into a pension scheme.