Only one in four people are saving for retirement, but more would if pensions offered guaranteed returns, according to research from Defaqto.
The research shows only 40 per cent are actually saving for later life and 20 per cent are not saving at all. But people are clear on what would make saving for a pension more attractive, with guarantees, tax incentives and flexibility on drawing benefits topping the public’s wishlist of what they want from a pension.
While 53 per cent of people feel that pensions are very important for financial support in retirement, 19 per cent do not believe that pensions are a safe investment.
More of a guaranteed return from their retirement savings was cited as making pension more attractive by 53 of the 1,000 respondents to the survey, while 40 per cent wanted better tax incentives to save for retirement.
One in three wanted more flexibility over when and how people can take the benefits, and a similar proportion wanted to able to pass on pension funds to dependants.
Defaqto’s survey also found that 21 per cent of people would be encouraged to save more for retirement if they were automatically paying into a company pension but were able to opt out.
Matt Ward, Defaqto’s wealth management consultant, says: “It is reassuring that over half of people see pensions as key to financing their retirement.
However, it is clear that people are not following this through in terms of actively saving for later life. The importance of planning for retirement is paramount, but people appear to be turned off by the idea of saving for their future.
“It is important for people to think about their retirement and to plan for old age as early as possible. At the same time, however, there is a clear challenge ahead for the industry to try to make pensions saving more attractive to people.”