Credibility gap grows as employees lose faith in pensions

UK
employees are losing trust in the ability of their employers and the Government
to help them plan for a secure retirement, according a new report.

Aon
Consulting’s annual survey, Pensions@Work, shows that only 19 per cent of
employees trust their employers to provide information relating to retirement,
while only 2 per cent trust the Government. 

The
study, which is based on the views of 1,500 people from across the UK, shows
that employees are more interested and knowledgeable about their pension schemes
than ever before.

Nine
out of 10 people now know whether their occupational pension is a final salary
or money purchase scheme – up by 43 per cent over last year’s findings.

The
research also shows 40 per cent of UK workers no longer believe that their company
pension schemes and state pensions will provide for an adequate retirement.

However,
only one in five people has made plans to supplement their pensions. Of those
workers who are taking action to supplement their pensions:

–
32 per cent plan to use other investments to fund their retirement

–
21 per cent plan to continue to work part-time

–
14 per cent plan to establish a personal pension plan

–
14 per cent intend to use their spouse’s pension

–
10 per cent plan to use a property sale

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–
 4 per cent are relying on living on an
inheritance. 

By Michael Millar