Tax confusion, a lack of information on pensions, along with an insecurity of not knowing how much they will get at retirement are still major barriers preventing individuals in the UK putting money into their pension, new research indicates.
A survey conducted by stakeholder pensions provider, B&CE finds 42% of respondents believe ‘knowing what they will get at retirement’ is the most likely means to encourage saving, while four in ten respondents believe better information (ie: workplace partnerships) on pensions is likely to foster action.
A third of individuals want to see their pensions savings equally met by the government as a means of persuasion to save voluntarily.
B&CEsays tax issues regarding pension saving can also potentially act as a deterrent and are highlighted by one in four respondents, who believe that clearer tax incentives would encourage people to start saving.
The group urges the government to consider offering employer tax breaks to encourage workplace provision, while also encouraging the Pensions Commission to investigate implications on implementing a flat rate tax relief of 30%, which it believes will benefit the lower to middle income groups, a major government target.
John Jory, deputy chief executive, B&CE Benefit Schemes, says it is clear the current system does not work and does very little to persuade and encourage employers and employees that retirement saving will provide a comfortable future.
He says: “One of the issues identified by the Pension Commission in their first report is the reluctance on the part of individuals to save for their retirement. This is particularly the case for lower to moderate earners.!
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 Gareth Vorster on 020 7968 4554 or email [email protected].IFAonline
Paul Bruns and Elaine Parkes
3,000 left to transfer
Record numbers of people aged 90 plus
From 3 to 10 October