Lack of understanding leading to a lack of pension saving

Anthony Murphy

Posted on: 25th September 2019

There has been a common theme to articles in the pension press over the last week or so – the lack of education and understanding within the general population around pensions is leading to poor choices and a negative view on pension contributions.

An article in this month’s Pensions Adviser highlighted that a lack of education is leading to nearly 40% of their survey’s recipients saying that Pensions are a ‘waste of money’ and one in five are not bothering with pensions at all. Yet, conversely, nearly half of the 2,000 respondents worry that they will not have enough money saved up to last their retirement.

With defined benefit pensions closing and the State Pension an ever-increasingly volatile political tool, the need for a private pension provision has never been more important to ensure a secure financial future into retirement.

Auto-enrolment has helped with ensuring that a greater proportion of the public has a private pension, however, there is still an option to opt-out, therefore, a strong understanding of how pensions operate and why they are vitally important – our blogs over recent months have been exploring the different aspects of pensions and the different contribution options, and our Pensions guide gives you a one-stop-shop for a whirlwind tour of pensions.

Both Darren Laverty of Secondsight, an award-winning benefit specialist firm, and Jame Smith-Thompson of Portafina, agree that financial education needs to start in the education system – teaching high school and college students on the different aspect of saving for the short, medium and long term. Starting to educate at a younger age could have a massive impact on financial literacy and eradicating pension poverty.

Pensions are the most powerful savings tool most people will ever have and yet nearly half of savers worry they will not have enough to last their retirement is of great concern and shows the need for urgent action.

As Chartered Financial Planners, Haven IFA are perfectly positioned to advise the best way to save and secure your financial future now and into later life. Get in touch to take that first step to financial liberation.