The Government’s 2013 budget has confirmed plans to simplify the pensions system, through the introduction of a single tier system in 2016. However, this research highlights that the population is already struggling to keep up with the raft of changes.
In addition to the announcement of a single-tier system, the past 12 months have also seen substantial changes in the world of retirement saving through the introduction of auto-enrolment into workplace pension schemes. These initiatives are undoubtedly a positive move in encouraging retirement saving, but the research shows that consumers are still getting to grips with the various initiatives.
Over a quarter (28%) revealed that they didn’t know anything about the changes – and a further two-fifths (44%) only knew about some of them – showing that large parts of the population are not clear on their provision for retirement.
Worryingly, over a third (37%) of respondents are less confident in their ability to save for a comfortable retirement in light of the changes – only 7% were more confident. Those over 55 were the most pessimistic with only 3% feeling confident in their ability to save for a more comfortable retirement.
Colin Williams, Managing Director, Corporate Benefits, at Friends Life comments:
“Although these findings are worrying, Friends Life supports the government’s reforms and believes they create an improved, more positive environment for pensions saving. Some consumer confusion following these changes is understandable given their extent. What is crucial is that both industry and government improve communication around the changes and that we ensure there is some legislative stability for these changes to fully bed in. We need to make sure people are encouraged to save for their retirement and are confident that saving now will reap rewards in their later years.”
