Researched carried out by insurer Aegon has shown that the reformed government group’s idea on boosting pension provision is not going to do enough, therefore we still have a finical crisis on our hands. With the lack of confidence and knowledge about how pensions can actually benefit people, they are ignorant to the rewards they could be gaining from having a pension.
In a report published yesterday, suggestions by the independent research carried out in partnership with the Pensions Policy Institute found that there was little awareness and understanding of the advantages of a pension and how pension tax relief works.
To overcome this problem, Aegon suggested working closely with employers, and employees both in the public and private sector, firstly to promote the idea of the benefits of a pension and secondly to boost engagement with pension provisions.
Also, the idea of automatic enrolment into pensions, when you start with a company is an idea that has been brought about, however the key is to educate people on the costs and benefits of a pension.
Otto Thorsen, chief executive of Aegon UK, said, “There’s some evidence that the current system has a number of positive basic design elements and can influence behaviour.
“But it also suggests the current system to too complex, there’s very low awareness of the benefits and current incentives aren’t enough to overcome people’s predilection for investing in property.”