Just 30% of people think the government will implement its proposals on personal accounts and auto-enrolment, according to a report from the Association of British Insurers.
The State of the Nation’s Savings report reveals levels of trust in the government are very low in relation to pensions and people have little idea of what has been proposed for state pensions.
Of the 3,117 people surveyed, 2% trust the government ‘a great deal’ in relation to state pensions and 1% trust it ‘a great deal’ in relation to private pensions, while 27% have a ‘clear’ view of how much state pension they can expect to receive in retirement.
The report says in the run-up to 2012 there needs to be further open and constructive debate, with policyholders communicating their ideas more effectively than they have to date.
A further 56% of the working population expects to receive some private pension income when they retire, but 27% of this group are either not currently accruing private pension rights or do not know whether they are.
The report predicts the number of people in defined contribution (DC) schemes is likely to overtake those in defined benefit (DB) schemes over the coming year, as the figures currently stand at 30% and 32% respectively compared with 26% and 34% the previous year.
As a result, it says policymakers will need to decide whether it is sustainable for the public sector to continue offering DB schemes as the norm and what actions could be taken to encourage employers to do more to share the risks of pension provision with their staff.
In addition, it shows 29% of the population is not saving anything for their retirement, while 16% are not saving enough.
There are slightly more female non-savers (53%) than male non-savers (47%), which is likely to reflect the fact women earn less and work fewer hours than men on average.
Only 35% of the working population have no non-mortgage debts and, among those with some debts, 29% have debts totalling £10,000 or more.
The average amount owed is £6,380, which suggests among people who work the total owed is £177bn.
Chris Kenny, director of life and pensions at the ABI, says: “Over 12 million people are still not saving enough for their retirement and many don’t believe the government’s plans to increase saving will ever be enacted. In this context, it’s even more vital that the government takes action to ensure that existing private pension provision, which serves millions of people well, is allowed to prosper and grow.”
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 Emily Perryman on 020 7968 4554 or email [email protected].IFAonline
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