Despite recent coverage of proposed pension reforms, over two million workers believe the state will provide an adequate pension, says B&CE Benefit Schemes.
In a survey of over 750 workers, B&CE found 2.5 million workers believe a state pension of £84.25 a week for single people will provide for them in retirement, although 27% admit they have no idea how much the state pension is, and 21% guessed it is a figure higher than the actual amount.
Meanwhile, 11% of those surveyed would rely on government benefits if they had to retire before they could claim their state pension, an issue of particular importance as the government plans to increase the state pension age for both men and women to 68 between 2044 and 2046.
And according to B&CE the survey reveals 28% of the 4.7 million people not currently saving - and the target group for personal accounts - do not know how they will support themselves in retirement, while 21% haven’t even thought that far ahead.
However, the findings revealed some regional variations, as 52% of workers in London planning to rely on their own savings to top up their pension, compared to other parts of the country, such as the North-West, where only 18% believe they could survive on their savings.
B&CE says the findings underline the unrealistic expectations many people have about how they will be providing for themselves when they stop working, along with people’s misconceptions about how much the state will provide for them.
The group points out while the majority of people support the idea of auto-enrolment, a key component of the proposed personal accounts system, 40% of those surveyed are still not convinced it is a move in the right direction.
John Jory, deputy chief executive of B&CE Benefit Schemes, says it is "incredible" there are some people still under the illusion the State will provide for them in retirement, and the research underlines this as an issue which still needs to be overcome.
He adds: “The survey reveals 38% think the government’s plans for pension reform should take effect earlier than 2012, as is currently scheduled. We are continuing to emphasise the importance of taking appropriate action sooner rather than later, especially as many employers are already providing access to good pension schemes.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Nyree Stewart on 020 7968 4558 or email [email protected]IFAonline
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