Research reveals 20% hadn’t checked current workplace pension

With a recent report suggesting that adults in the UK have ‘worrying levels’ of understanding when it comes to pensions, Stuart Price of Quantum Advisory is calling for pensions to be taught in schools

RESEARCH by Tilney found that 20% of those questioned had never checked their current workplace pension and a quarter didn’t know if their current scheme is a defined benefit or defined contribution arrangement.

The results are extremely troubling, although I don’t think they come as a surprise.

Nearly 70% of respondents said they find pension terms confusing, and, unless you take the time to understand your pension or have it explained to you, then of course it’s going to be confusing.

The universal introduction of the Pensions Dashboard, planned for 2019, aims to provide a simplified way for individuals to see all their pension savings in one place and will no doubt help to address much of the perplexity. Showing an individual the overall income they could expect in retirement may shock some people and help them realise they need to be saving more for their retirement than they realise.

Although the Pensions Dashboard should help clear some confusion when it comes to the pension minefield, I do think the problem requires more action, particularly with the younger generation entering the workforce.

As well as employers doing their bit, I believe pensions should be taught in school alongside business studies and careers advice. People shouldn’t drift through their working years thinking their pension is someone else’s problem, then find they haven’t got enough money to live on near their retirement.

They should be fully equipped with all the knowledge before they even start work to ensure they can take control from the very beginning, as the younger they start, the bigger impact this will have on their retirement income.

Unfortunately, relying on the state pension will simply not be an option when the younger generation eventually come to retire.

■ Stuart Price is partner and actuary at Quantum Advisory, which has offices in Amersham, Birmingham, Bristol, Cardiff and London. Quantum provides pension and employee benefits services to employers, scheme trustees and members. For more information about Quantum Advisory, visit quantumadvisory.co.uk