Employees see pensions as the best retirement saving tool

Staff increasingly see pensions as the best way to save for retirement and as the most important employee benefit employers can offer, but they have become less confident their pension will deliver.

According to the National Association of Pension Funds’ (NAPF) Workplace Pensions Survey 2010, 44% of employees said pensions were the best way to save for retirement. This was a marked rise from 35% this time last year, and was more than twice the number who cited property as best (20%) and almost four times the amount who chose individual savings accounts (Isas) (12%).

Four out of ten (41%) thought pensions are the most important employee benefit, an increase on 31% last year. A bonus and flexible working came in joint second place at 17%.

But only a third (35%) of respondents said they were confident their pension will give them enough to live on in retirement.

Joanne Segars, chief executive at the NAPF, said: “As we emerge from the recession, people are able to take a longer-term view on saving, and are showing more interest in workplace pensions.

“The UK is facing a crisis in saving for its old age, so it is encouraging that growing numbers see the importance of a workplace pension. Ahead of the introduction of auto-enrolment into pensions in 2012, this bodes well.

“The erosion of confidence in pensions is a real concern. Without a greater belief that saving in a pension will result in a more comfortable old age, we will struggle to persuade people to save for their retirement.

“We need a simpler state pension that provides a solid foundation of basic retirement income and which lifts people off means-testing to ensure that people keep what they save. That would be a major step forward in restoring confidence in pensions.”

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