Almost half of UK workers are not confident their pension will provide a comfortable retirement, according to new research from workplace pension provider Penfold, highlighting a gap in pension confidence among employees.
The research also found that fewer than one in three workers (29%) trust their pension provider most to explain how their pension works, suggesting a growing disconnect between pension savers and the organisations managing their retirement funds. Nearly one in ten workers have never checked their pension at all, while 82% face at least one barrier to engaging with their retirement savings.
Published in Penfold’s ‘The UK Pension Gap’ report, the research found that more than a quarter of workers (26%) feel anxious or confused when thinking about pensions, while over one in five employees (22%) do not understand how their pension works. The findings suggest that while automatic enrolment has transformed pension participation in the UK, confidence in retirement outcomes has failed to keep pace.
“It’s a concern that so many people don’t feel confident they’ll have enough money to retire comfortably,” says Chris Eastwood, CEO and co-founder at Penfold. “Auto enrolment has helped millions of people start saving, but our research shows that many still don’t understand how their pension works or whether they’re on track.
“People shouldn’t feel embarrassed by that confusion. Pensions have too often been designed around compliance, rather than helping people make informed decisions. When savers can clearly see what they and their employer are contributing, and how small changes affect their future, they’re much more likely to engage.”
“Employers also have an important role to play. A workplace pension is one of the most valuable benefits many people receive, yet its value is often overlooked. Helping employees understand it is a simple way to improve financial wellbeing and confidence.”
Eastwood concludes, “Pension Dashboards are an important step forward, but visibility alone isn’t enough. People need information they can understand and act on. Improving pension confidence isn’t about rushing to become an expert overnight: clear information and small habits built over time can make a significant difference to the type of retirement savers can achieve.”
To read the report in full, click here: https://getpenfold.com/pension-gap
