16th July 2007, London:
Britons are gambling with a bleak retirement because they find pensions mind-numbingly boring. Whilst more than half of us (58 per cent) have a pension, almost as many (54 per cent) don't know whether what were putting aside will be enough to see us through retirement, according to new research by JLT Benefit
Solutions Ltd (JLT)1.
Worryingly, the age-group with the highest pension uptake is also the least knowledgeable: while 68 per cent of 35-44 year-olds have a pension, a shocking 60 per cent of them have no idea how much money they will need when they retire.
Which is dangerous, because pensions are increasingly based on market performance, so whatever you put in it isn't always easy to work out what you get out. Moreover, recent government estimates reveal that retirement could make up as much as a third of our lives2.
Overall, half of us (49 per cent) admit that, while important, we find the whole subject a massive turn-off". A further quarter (26 per cent) says they tend to glaze over whenever people talk about pensions. More than a third (34 per cent) of 35-44 year-olds agree, while one in ten (13 per cent) confess that they'd even rather visit the dentist than talk to pension advisor.
Dry and complicated pension jargon is at the heart of the problem. Roughly half (46 per cent) believe that there's too much complicated language and that employers/providers should make greater attempts to speak in plain English.
But research also showed that this uncertainty is quickly turning into widespread scepticism, fed by the pension industry's recent and historic PR disasters.
1 YouGov conducted a survey for JLT Benefit Solutions Ltd between 27-30 May, 2007, in which 2,106 UK adults in full-time employment participated.
2 Pensions: the basics, A guide from the Government
Within six months, following the tax credit bombshell, Britons are more sceptical about whether contributing to a pension is worthwhile - rising roughly 10 per cent since October 06 to over a third (36 per cent). Scotland fairs better, with 70 per cent of workers in the region paying into a pension scheme - almost 20 per cent higher than some parts of England.
Duncan Howorth, MD of JLT Benefit Solutions Ltd, said "Ignorance and apathy are a dangerous cocktail when it comes to saving for retirement. Clearly, some people simply switch off when it comes to money, or long-term planning. But we as an industry must help by finding a way to communicate the core value of pensions - and the importance of having clear financial goals - without either boring people senseless or creating cynicism by failing to deliver on our promises".
JLT believes tackling these problems requires action on two fronts by employers. Firstly there is the issue of basic financial education. JLT is pioneering a new service that takes financial education to employees through a series of workplace seminars. Delivered by experienced independent financial advisors, the programme is designed to make the thorny issue of pensions easy to understand, while also broaching broader issues including savings and investments, personal taxation and state benefits3. Secondly employers need to make sure that the benefits that they do offer are effectively and clearly communicated to employees in a way they understand and through a channel that suits their needs4.
3 This is new JLT Service, which is being provided through JLT's Private Clients team of 15 Consultants. So far the Children's Mutual have used the service.
4 JLT Benefit Communications was launched 2003, working with clients to provide the best benefit communications solutions for their scheme members and employees.
Notes to Editors
About JLT Benefit Solutions Limited
JLT Benefit Solutions Ltd is part of the Jardine Lloyd Thompson UK Employee Benefits Group and employs over 800 professional staff in 10 offices in the UK and has revenues of over £75m. JLT Benefit Solutions Ltd is authorised and regulated by the Financial Services Authority. It has four main operating divisions:
Focuses on third party pensions and benefit administration.
Delivers actuarial, investment, pension, benefit and reward consulting services. As well as group risk, healthcare and flexible benefits services.
Premier Pension Services
Supplies a range of SIPP and SSAS services to IFAs, accountants and lawyers.
Financial Institutions Services
Provides outsourcing solutions for a range of pension products on behalf of life
Pensions Capital Strategies, Independent Trustee Services and Profund are also part of the Jardine Lloyd Thompson UK Employee Benefits Group. As well as being a major provider of employee benefits services and related consultancy advice the Jardine Lloyd Thompson Group of companies is a leading risk management adviser, insurance and reinsurance broker.
Jardine Lloyd Thompson Group plc is quoted on the London Stock Exchange and is the largest European-headquartered company providing these services and is one of the largest firms of its type in the world. It operates out of more than 100 offices in over 30 countries and employs more than 5000 personnel.