29th September 2016
Nearly half (40%) of 18-30 year olds consider their knowledge of pensions to be poor or very poor and three in five (60%) don’t know what a workplace pension is according to research* from workplace pensions provider NOW: Pensions.
When asked why they consider their knowledge of pensions to be poor, two in five (42%) say they don’t need to understand them as they are a long way off retirement, and around one in four (27%) say they find pensions too complex, whilst nearly three quarters (71%) of 18-30 year olds say they find pension terminology and jargon a barrier to engaging with the subject.
Despite anyone over the age of 22 earning at least £10,000 a year being auto enrolled into a workplace pension, as part of the new workplace pensions legislation introduced in 2012, over half (58%) of 18-30 year olds admitted they still don’t know what auto enrolment is.
When it comes to understanding other financial products, knowledge of savings and credit cards is better with only 13% and 19% respectively stating they have a poor understanding. In fact, the only financial services product that young people feel they have less understanding of other than pensions, was investments, where 43% say they have a poor or very poor understanding.
Morten Nilsson, CEO of NOW: Pensions said: “This pensions blind spot among younger people should be raising a warning flag for the government and industry.
“Auto enrolment is going to bring thousands of younger people into workplace pension saving, but if their understanding is poor, there’s a real risk that the policy will be undermined.
“The industry needs to work harder to eradicate jargon, making pensions more understandable for young people so the benefits are better understood.
*Research conducted by market research firm Opinium online with 1,000 UK adults aged 18-30 in May 2016