More than half (54%) of employees are not confident in pensions compared to other ways of saving, according to research conducted by the National Association of Pension Funds (NAPF).
The survey, run by pollsters Populus, also found that a third (33%) of those who are eligible for auto-enrolment will not stay in their new pension. When asked why, 40% said they do not trust the pensions industry, up from 27% in October 2011. Over a third (35%) said they cannot afford it, and 23% said they did not trust the government on pensions.
Joanne Segars, chief executive of the NAPF, said: “In its Budget submission, the NAPF warned the government against eroding consumer confidence by making further changes to pension tax relief.†
“It also said the authorities should avoid more delays to auto-enrolment. Instead, the government should focus on making the annuities system work better and on reforming the state pension.
“We have to bolster faith in pensions if our society is to pay for its old age. Auto-enrolment could be a huge step forward, but we are going backwards when it comes to confidence in the product.
“Quitting a workplace pension can mean losing tax breaks and employer contributions, which are, in effect, free money. The benefits of auto-enrolment need to be more widely understood.
“The weak economy and roller-coaster stock market may have put many off pensions, but there are also growing doubts about whether a pension is good value, and these need addressing.”
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