Many pension savers don’t understand what they’ve signed up for, what their pension benefits are, or what they actually mean, according to the findings of a recent survey.
The majority of respondents, 41 per cent, don’t understand what their workplace pensions represent in terms of what they pay in and what they will get when they retire, according to a YouGov poll of 1,000 UK adults conducted on behalf of financial services firm Drewberry.
The 2022 Drewberry Workplace Pension Survey discovered that an even higher percentage of those polled had a poor understanding of important tax relief benefits associated with their workplace pension, posing challenges for both pension providers and employers in adequately explaining what their employees are getting.
A total of 87 per cent of poll participants stated they were contributing to a workplace pension, with 56 per cent saying that having a pension provided by a firm was an important factor to consider while looking for a new job.
According to the YouGov/Drewberry poll, nearly half of respondents were unaware of how much their employer contributed. Additionally, more than a quarter of participants or 29 per cent believed their employers were not contributing enough, while 34 per cent believed they were not giving enough themselves.
Around 58 per cent of people wanted to know if they were saving enough money for retirement. Meanwhile, nearly a third or 27 per cent believe their company keeps them in the dark regarding the amount they contribute to their pensions since there is little or no communication about it. One-third of employees stated they would prefer a meeting with a financial counsellor, which would be paid for by their employer, to assist them to understand.
Drewberry director Tom Conner says: “People have a right to know all the details of their workplace pensions, so they fully understand how they work and what they will eventually get, to support their life when their careers are over.
“Pension providers and also employers need to do more to outline exactly what the benefits are for people signing up for pensions, so they’re clear about their monthly payments and what they will get at the end. It’s up to pension firms and people’s bosses to explain where people stand with their pensions, so there are no doubts about this financial product.”
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