More than seven million workers are unaware of the tax benefits of saving into an occupational pension, according to new research.
Independent research carried out for pension providers B&CE Benefit Schemes found that 40% of the working population in the UK were unaware of the tax incentives for pension savings. The percentage rises to 46% for working women.
Half of those aged between 25 and 34 were unaware of the tax advantages – an age that pensions experts believe is crucial for making sure retirement savings are on track.
The survey also found that one in four workers – equivalent to 4.7 million people in the UK – were not saving at all for retirement.
The main reasons given were:
I can’t afford it – 30%
I haven’t gotten around to it yet – 22%
I’m too young – 15%
I have other financial priorities – 15%
The age group that showed the biggest strain when it came to putting money aside were 35- to 44-year-olds, where 45% said they were unable to afford pension saving.
One thing that will reassure the government was that almost all respondents (80%) said they could afford the 4% of income that Labour had proposed as an automatic contribution to its proposed National Pensions Saving Scheme (NPSS).
John Jory, deputy chief executive of B&CE Benefit Schemes, said it was encouraging that people were prepared to get involved with the NPSS, but warned that those not saving already should not wait six years for the scheme to start.