KRS reveals lack of trust in government as pension crisis looms

Research from Key Retirement Solutions shows that 41% of UK consumers believe the government should be responsible for ensuring people have good pensions provision to help them enjoy a comfortable retirement.

However, the worrying reality is that less than one in 5.17%, of consumers actually trust the government to help them make sufficient arrangements for retirement.

The research further reveals that almost a third of UK consumers, of 27%, only trust themselves to ensure that they make adequate provision for retirement.

After themselves, consumers trusted Independent Financial Advisers (22%), employers (18%) and pension providers (13%).

Despite, this strong emphasis on self-reliance the survey also showed that approximately 12.14 mn (33%) people of working age in the UK had made no pension provision.

Of those people who had made no provision for their retirement, the majority (55%) said they didnt earn enough to pay into a pension.

However, 15% said they were worried about making the wrong choice, 12% said they were too young and – most worryingly – 7% said they simply couldnt be bothered.

In addition to worrying about having insufficient money to enjoy their old age, the most concerning aspects of peoples retirement finances were having to work in retirement (17%) and having to rely on the state pension for the majority of their income (17%).

These worries were prompted by getting older (28%), newspaper coverage of the pensions crisis (26%) and government announcements about the state pension (24%).

Of those respondents who were worried about their retirement, 28% said their fears had caused them to start a pension, 22% had researched pension options and 24% had started a savings account.

The most popular vehicle for retirement saving was pensions (53%) followed by tax efficient savings plans (15%), ordinary savings accounts (11%), bonds / equity funds (7%) and property (7%). 7% of those who had made some sort of provision for retirement intended to use equity release on their own property.

Dean Mirfin, business development director at Key Retirement Solutions, says: When we commissioned this research, we had hoped it would show that consumers had heeded the warnings from the government as well as the financial services industry about the impending pensions crisis to heart.

“Whilst fear may have driven some people to start a pension, the concerns are not diminishing. We believe that there are now over 12million people of working age in the UK without any pension provision at all!

Although these statistics also show that 67% of people have put aside some money for retirement, it is also concerning to note that many peoples pension pots are unlikely to be sufficient for a comfortable retirement.

“We believe that this deficit will see people being forced to work longer, lead more frugal retirements and look to newer methods of retirement funding such as equity release.

It is worrying to discover that while consumers feel that the government should ensure that they have good pensions, they dont trust the establishment to help them make sufficient provision.

“People are more inclined to trust IFAs, which will be a boost for many in the financial services industry who are working hard to promote this level of trust.