Retirement Planning Monitor

New research from Marketing Sciences Ltd in the UK suggests that consumers are increasingly looking towards other ways of saving for retirement than pensions.

Of 1034 British adults interviewed in July 2002, over two thirds agreed that they prefer to save in a range of ways rather than just a pension. Moreover, nearly half agreed that they would prefer to save in some other way than a pension, an increase on 2001. Three quarters now have money saved or invested in ways other than a pension.

The survey sheds some light on the reasons for this, with nearly half agreeing that the unpredictability of the stock market would make them avoid taking out a pension. Moreover, even more people this year (63%) agreed that they find pensions confusing, while the degree of mistrust in financial institutions is now so strong that 41% agreed that they don't trust anyone to invest their money safely and 65% don't believe anyone provides unbiased advice. Possibly the increase in house prices has also had an effect - more people bought/invested in property in the last year as a way of saving for retirement (8%) than took out a stakeholder pension (4%)

Encouragingly, the survey at least shows that the majority of consumers accept responsibility for providing for their own retirement. However, the number has fallen this year, with more consumers saying the Government, employers and financial institutions could all do more.

The survey gives some encouragement to the government in terms of solving the 'Pensions Crisis'. Firstly, the survey shows a high awareness of warnings about having to work longer and a willingness by many to save more in response. Secondly, an increase in the state retirement age would have a similar effect. Thirdly, many claim the introduction of the Pension Credit will increase savings (currently, over half of people feel that if you save for retirement, the state gives you less, so you are no better off). Finally, a majority are now in favour of making pensions compulsory.

For the survey, 1,034 adults were interviewed face-to-face in July 2002. All were aged 22 - 64 years and not yet retired being a nationally representative sample of the GB population.

All articles 2006-22 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.

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