New data has revealed that almost half (46%) of employees aged 35-54 do not know how much income their pension will provide them with in retirement.
Research by Invesco, Invesco Consulting, Maslansky and partners and Nest Insight looked at how simple changes to the use of language could help workers in their late 30s, 40s and early 50s to engage with pension saving, since 50% say they cannot afford to contribute more to their pension right now and 35% have more pressing financial priorities.
Two-fifths (40%) of respondents said that pensions are too overwhelming and 33% answered that Covid-19 (Coronavirus) had made them less confident in their ability to plan for the future. Only 20% feel they are on track when it comes to planning for retirement and 35% do not know what steps they could take to better prepare for it.
One-fifth (20%) were unaware of where to find information about how much money they have in their pension pot, while 38% were aware of online retirement planning calculators or resources and 5% had spoken to a free government pensions advice service or financial adviser.
In addition, 35% feel a sense of defeat when they think about retirement, with those in the 45-55 age group having a sense of regret that they had not started planning for it earlier in their lives.
Stephen Messenger, head of UK strategic institutions at Invesco, explained that it is widely recognised that effective communication is one of the largest barriers defined contribution (DC) practitioners face in engaging with their members.
“This study re-emphasises and highlights that the same communication targeted at people within different stages of their retirement planning can quite easily be tilted to become much more effective. The framework and method of communication outlined in this report is one which we strongly believe can be successfully applied to any DC scheme communication in a practical and easy to understand way,” he said.
