A recent survey which has been carried out by Scottish Widows has revealed that nearly 50% of all workers under the age of 50 have confessed to not preparing for their retirement. The survey also showed that 40% of employees consider the pension scheme on offer when looking at potential employers.
Lack of education
What the report highlights is the lack of education when it comes down to pensions. Around 50% of those polled had no clue as to the amount their employers where contributing to their defined contribution pension schemes. 43% of final salary scheme holders, and 33% of defined benefit scheme holders, believed that their pensions would be more than enough to support them during their retirements.
The interesting and probably most influential result discovered from the survey was that 40% of those surveyed felt that their employers should offer pension advice. 55% say that employers should at minimum provide general information about their company pension scheme.
“Employers have a very real responsibility to educate their employees”
The reality, especially for those with defined pension schemes, is that they need to be squirreling away up to £10,000 a year or more on average to ensure that their retirement income will cover the cost of maintaining their lifestyle. But the lack of understanding and knowledge means that many firmly believe their old age is financially covered.
“Within the UK we suffer from delusions on both ends of the spectrum. Many of us refuse to acknowledge the need to address our retirement preparations, while others erroneously assume that the preparations they have made are sufficient for a comfortable retirement. As it is often too easy to ignore the problem, employers have a very real responsibility to educate their employees” said Samir El-Alami of PensionCalculator.org, a leading website for annuity and pension information.