Just under half (49%) of respondents find pensions terminology to be complicated and confusing, acting as a barrier to effective retirement planning, according to research by Capita Employee Benefits.
Its Employee insight report 2016/17, which surveyed 3,006 UK employees, also found that 51% of respondents do not know how much they should be saving for retirement.
The research also found:
- 63% of respondents in defined contribution (DC) schemes do not know where their funds are invested.
- 51% of respondents do not know what income they will need when they retire.
- 57% of respondents would be happy to see further changes to pension rules if it made pensions easier to understand. Only 6% of respondents disagreed.
Rob Tinsley, head of retirement at Capita Employee Benefits, said: “We are all living longer, retirement can easily stretch to 30 or more years and for most of us a key question must be ‘will I outlive my money or will my money outlive me?’
“The area of pensions remains complex and with the introduction of possible alternatives such as [the lifetime Isa], the need for financial awareness has never been so great. This is endorsed by our insight findings where a clear need is indicated for improved financial education coupled with much earlier engagement on pension options. These, in turn, should be clearly and closely linked to life’s objectives and aspirations.
“Many trustees and employers are recognising a need to introduce some form of guidance and education from around the age of 50 so that scheme members can be better prepared and receive better outcomes from their hard earned savings.”
