Over 50% of active investors are confused by the upcoming A-Day changes to pensions, claims a new survey from TD Waterhouse.
Conducted by Mori, on behalf of the stockbroker, the online confidence survey questioned 511 active investors, those who had bought or sold shares in the last 12 months, about their pension provision.
The figures revealed 59% of those questioned were unaware of the new A-Day rules, and the remaining 41%, when asked to explain what the changes meant, gave answers which ranged from “You have to work longer before retiring”, and “Put money into a pension scheme” to the prophetic “We are all doomed”.
Of those respondents that were aware of the upcoming changes, 30% thought the government had performed “very poorly” in explaining the changes to the general public, while a further 38% thought it had been done “fairly poorly”. Just 10% of those questioned thought the government’s communications had done a “fairly” or “very good” job.
Looking at the confidence people had in their overall pension provision, TD Waterhouse’s online survey revealed 20% of non retired investors felt either “extremely” or “very” confident their pension would deliver an acceptable return, with an additional 40% saying they felt “fairly” confident their pension funds were big enough.
But when asked about the future of the State pension, investors were not so positive, with 52% of respondents expecting the basic State pension to have expired by the time they retire.
The survey also suggests that trust in pensions funds is at a new low, with 26% of private investors considering managing their own pension provision by starting a self invested personal pension (Sipp). Of the 511 investors surveyed, 8% already have a Sipp, while 14% have never heard of the idea.
Although Sipps are starting to be considered by more investors, few of them, according to the survey, will be investing in esoteric investments such as art and wine. One in three Sipp holders say they would consider residential property as an asset, while specialist investments such as racehorses interested less than 6% of investors, although fine art and wine were slightly more popular at 8% each.
Shares in UK companies are the most popular choice for 47% of investors, while shares in international companies and residential property both attracted 34%. These were closely followed by unit trusts at 28% and bonds and gilts came a close fourth with 24% of interest from investors.
Michael Foulkes, chief executive of TD Waterhouse UK, says Britain’s pension deficit stands at a staggering £130bn and the fact remains that not enough saving is taking place. He added that in order to address this deficit we need to find ways to encourage more people to start making long term financial provision.
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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