RSS Feed

Related Articles

Related Categories

Inside Out: why millions of Britons are saying 'no' to private pensions

15th September 2014 Print

An exclusive survey commissioned by the BBC’s regional current affairs programme, Inside Out reveals new evidence on why millions of British adults do not have a private pension.

Around half of British adults aged between 18 and 60 (48%) said they did not have a pension. Being unable to afford a pension right now is the primary reason given for not having one (39% of those without a pension gave this reason).

There are clear differences in the take-up of private pensions by gender, age and socio-economic grade. More than two thirds (67%) of adults in the AB socio-economic grades have a private pension; compared with less than a third (31%) in DE grades, according to the ComRes survey.

Perhaps most interesting for the pensions industry is the fact that one in five (21% of those without a pension) say they are investing their money in other schemes such as property and long-term savings. A similar number of people without pensions (18%) say they don’t trust pensions companies while 14% think pensions are “too confusing” and the same proportion (14%) believe they wouldn’t get a good enough return on the money they invested.

The survey comes as the Government continues to promote new workplace pensions through auto-enrolment. The Pensions Regulator announced last week that more than 4.4million workers are now investing money in such schemes.

Tom Mludzinski, Head of Political Polling at ComRes, says: “With auto-enrolment being rolled out, this poll reveals some of the problems people perceive to exist around pensions. Clearly a significant section of the British population feel they are either unable or reluctant to invest their money in this way.

“There is a clear sense that many Britons feel disempowered with regard to private pensions – whether economically or through a lack of knowledge or trust.”

The second most common reason for not having a pension is the widely held belief that people are “too young” to think about pensions (28%) – this belief is held by almost three quarters (72%) of those aged between 18 and 24 who do not have a pension, compared to just 2% of those aged between 45 and 54.

In the programme Pensions Minster, Steve Webb, says: “The first thing we’ve got to do is get millions of people into a pension at all – particularly starting with young people. And then we’ve got to build on that basic minimum level.

The minister also highlights the new auto-enrolment workplace pensions as the way forward. And asked about charges imposed by some pensions companies he replies: “In the past too many people have been ripped off frankly with pensions. These new workplace pensions will be different because we are going to cap the charges. From next April more than 99p in the pound - that you put into a pension - will go into the pension, not into charges.

“They will be the best value pensions, particularly because your firm is putting money in as well – one of the best things you can invest in.”

In the programme, pensions expert, Dr Ros Altmann, says: “The main message has to be – if you don’t save for your later life, what are you going to live on?

“The state pension, certainly for those who are relatively young now, is changing dramatically, and from 2016 onwards younger people will know that when they get to retirement the state pension is going to be around £20 a day.

“Now if you think you’d be happy living on £20 a day for the rest of your life when you’ve reached retirement, fine, don’t do anything. But if you think you might want more than £20 a day to have a decent lifestyle, then unless you do some saving now you won’t have any money coming in from that pension later.”

Inside Out is broadcast each Monday at 7.30pm on BBC One for the next seven weeks across England and has eleven variations, one for each English Region. Inside Out features investigations, surprising real-life stories, local news and hard-hitting current affair from around the country.