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Ninety three
per cent of UK workers do not know what the basic state pension
is, according to research by B&CE Benefit Schemes (B&CE).
12 per cent believe it will provide an adequate income by the time
they retire, and less than half (49 per cent) of UK workers know
that there are tax incentives for saving in a pension. The research
found that 63 per cent of those surveyed have no idea what they
will be entitled to when they retire, with 93 per cent of this group
accounted for by the 16 to 24 year old age group.
Over half of all UK workers do not know what they should be putting
away for their retirement, and nearly two in five (38 per cent)
believe that free personal advice from a financial expert would
help make pensions easier to understand. This was the most popular
option from a list of ideas presented to interviewees. 33 per cent
said pensions taught in school would increase understanding, and
27 per cent said employer presentations would be their choice in
learning about them.
John Jory, deputy chief executive of B&CE, said: “We need
to do more to educate people about the reality of the state pension
and what this means in monetary terms. Just as holiday pay does
not cover the cost of a holiday, the basic state pension will not
cover more than a basic level of subsistence.
“People should not expect to continue the standard of living
they have enjoyed throughout their working life at retirement unless
that have saved in a pension. Perhaps we need to step away from
the term ‘pension’ and re-name those funds ‘retirement
pay’.”
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Pensions Age June 2008
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