The Money And Pensions Service (MAPS), the single financial guidance body set up by the Government, has revealed its concerns over the general public’s lack of knowledge regarding pension savings.
The Service’s survey asked respondents to indicate whether they believed certain statements regarding pensions were true, or false, or whether they were unaware if the statement was true or false.
The results included:
- 57% did not know that they can access their pension early were they to be forced to retire early with a serious illness – 18% believed this statement was false and 39% responded with ‘don’t know’
- The majority of respondents indicated that they believed it could be true that pension savings growth rates could be similar to those in a savings account – 18% said this was true and 34% answered ‘don’t know’ to this question
- Only 14% definitely knew that pension contributions could continue while on parental leave – here the MAPS press release also reveals that women were less likely to be aware of the correct position here, with only 39% of women aware that they could definitely continue with contributions in these circumstances, compared to 49% of male respondents
- Only 37% knew that there was still tax relief on self-employed pension contributions, although this was based on the responses of all participants and it is not necessarily the case that the majority of self-employed people are in the dark about this
- 78% knew they could commence pension savings as soon as they were in employment, no matter how young they might be
- 67% were aware they could leave their savings growing in pension schemes until they needed to access it
- 60% knew there were benefits to paying more than the minimum contributions to a workplace pension, and 65% said that they were aware they still needed to monitor their contribution levels once they had been auto-enrolled
- Only 13% thought they would lose their entire workplace-based pension savings were their employer to go bust and 51% knew that this was false
Caroline Siarkiewicz, Acting CEO of MAPS, said of the survey findings:
“It’s clear that many people are unaware of their options when it comes to important events in their lives that can impact their pensions such as becoming a parent or starting their own business. Women in particular have many important financial decisions to make when transitioning into parenthood, but our findings suggest they are less likely to be aware of their pension options.
“It is positive to see that people have an understanding of how automatic enrolment works. However, our findings suggest that many might be missing out on important information when making decisions affecting their pensions.”
MAPS has completed the appointments to its steering group for the pension dashboard, the initiative that will allow consumers to view all of their pension savings in once place.
However, the Service still wants to hear from industry representatives interested in serving on a dashboard industry working group.
The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article