One in three employees want paid-for adviser pension consultations

One in three employees want paid-for adviser pension consultations

Nearly a third of employees believe they are being kept in the dark over their pensions by their employers, while a similar amount (28 per cent) want their employers to pay for meetings with advisers to discuss their retirement savings.

Research by Drewberry, carried out by YouGov, gathered the views of 1,000 UK adults and found that 41 per cent do not understand their workplace pensions or how much they are contributing.

Almost one-third (27 per cent) said they felt they were being kept in the dark by their employer when it comes to contributions. 

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More than a quarter of respondents (29 per cent) did not think their companies paid enough into their pensions, while 34 per cent believed they were not contributing enough themselves.

Meanwhile, 58 per cent said they wanted to know for certain if they were contributing enough to their workplace pensions. 

A lack of understanding was the main driver for wanting meetings with advisers. Only 7 per cent of employees in the survey said they are offered this form of communication.

Nearly all respondents are contributing to pensions (87 per cent), with this largely down to auto-enrolment. 

Despite this uptake, many employees still fail to understand how their pension works, or even how much they are contributing. 

When asked if they had a good understanding, 28 per cent disagreed, with 29 per cent neither agreeing nor disagreeing.

The survey findings indicated an overall lack of understanding of retirement saving and how pensions work.

Out of the respondents, 48 per cent admitted they do not understand tax relief nor salary sacrifice. 

Tax relief is one of the major benefits of workplace pensions, which suggests employees not understanding this concept could be missing out on an opportunity to boost their savings.

This lack of understanding was extended to employees’ overall retirement plans.

When asked if they thought they were contributing enough to the pension, 24 per cent disagreed.

However, 47 per cent agreed they felt they were contributing enough to their workplace pensions.

These lags in understanding need to be tackled, according to Drewberry director Tom Conner, who said more needs to be done to educate savers on their pensions and to what they are contributing. 

“Pension providers and also employers need to do more to outline exactly what the benefits are for people signing up for pensions, so they’re clear about their monthly payments and what they will get at the end,” said Conner.  

“It’s up to pension firms and people’s bosses to explain where people stand with their pensions, so there are no doubts about this financial product.” 

Jon Yarker is a freelance reporter at FTAdviser's sister publication Pensions Expert