Only a minority of working adults (44 per cent) feel they understand enough about pensions to make decisions about their retirement, according to new data from the Office of National Statistics.
Its Wealth and Assets survey looks at a range of attitudinal data, including looking at individuals attitudes towards pension and longer-term savings.
While pension saving has increased significantly in recent years, largely due to the success of the auto-enrolment programme, this regular data on attitudes shows there has been little increase in understanding or confidence about pension saving over this period.
Insurers says this latest data highlighted the need for better education and engagement around pension.
Aviva head of savings and retirement Alistair McQueen says: “Auto enrolment has driven pension participation towards 20m and beyond for the first time ever. But still only a minority of adults feel they understand enough about pensions to make decisions about saving for retirement.
“This level of understanding has hardly budged over the past decade, despite pension participation nearly doubling.”
He claims as a result many may be “flying blind in retirement”.
He says: “The same ONS data reports that just one-in-three (32 per cent) working adults have given any consideration to how many years of retirement they need to fund. At the same time, we have learnt that 1.5 million adults have taken advantage of the pension freedoms since they were introduced in 2015.
“This equates to more than one million UK adults who may have given no thought to their length of retirement while using the pensions freedoms.”
McQueen says that as a result more must be done to close the guidance gap.
“The government-backed Money Advice Service can be a force for good here, and the industry must continue to work with the regulator to ensure rules do not prohibit help.
“Most importantly, innovation must push new ways of building confidence. Aviva offers its mid-life employees access to a ‘mid-life MOT’. This session provides guidance on how to manage our wealth, work and wellbeing as we progress through our careers. Early insight suggests the mid-life MOT can boost participant confidence by 22 per cent.”
Separate research by Aviva also found that despite this lack of confidence more than a third of pension savers ( 37 per cent) have taken action relating to their pension during lockdown.
