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Employee Benefits News

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13 Aug 2012

Employees Fail To Save For Pensions, Concerned Over Making Wrong Decisions

Nearly three in four people who are not in a workplace pension say they do not put enough aside because they do not want to make the wrong decision about saving for retirement, according to results from a new survey by the National Employment Savings Trust (NEST).

In addition, some 47% of people said they did not know enough about what would their best option be. It is no surprise that people are baffled, NEST notes. There is widespread concern among employees that their pension pots are getting smaller, amid low interest, savings rates and gilt returns, and market uncertainty. Moreover, the upcoming automatic enrolment into workplace pension schemes is also presenting both employers and employees with uncertainty.

Elsewhere, the report also finds that two in five people would like to spend any extra money they have on holidays, while one in five would invest in home improvements. A further 20% would spend the money on socialising, while a modest 12% would put money aside for retirement. NEST believes that people will have to prioritise their needs for the future by saving up for later days.

Meanwhile, experts are warning that pensioners-to-be should shop around in search of the best annuity rates, rather than taking the annuity rate offered to them by their pension provider, as this might lead to up to 20% higher income during retirement.  

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