According to the National Association of Pension Funds, almost half (44 per cent) of all employees think a company pension is the best method of saving for the future, and four out of 10 people see pensions as the most important employee benefit.
This is an increase from last year, when 35 per cent agreed that company pensions were the best way to save. It is also more than twice the number of people who chose property as the best savings vehicle. The NAPF survey polled 984 individuals in September.
Joanne Segars, NAPF chief executive, says sluggish property growth and weak interest rates have helped raise pension awareness.
But she explains that the UK is facing a crisis in saving for old age and only a third of people are confident their pension will be enough to live on after retirement.
‘The erosion of confidence in pensions is a real concern. We need a simpler state pension that provides a solid foundation of basic retirement income, which lifts people off means-testing to ensure people keep what they save. That would be a major step forward in restoring confidence in pensions,’ she says.
From October 2012, the roll out of the National Employment Savings Trust (Nest) means up to eight million people will start saving into a pension for the first time. All employees earning at least £7,475 will be automatically enrolled into a government pension plan unless their company already offers a scheme.
Although the findings show people are less keen on saving for retirement through an Isa, they are a good option for younger savings and could be used to save for a property deposit or rainy day savings.
Credencis say the findings from this report are positive and show more people are recognising the importance of pensions but also realising that they need to save more for a comfortable standard of living in retirement.
They advise getting a projection, if you do have a company pension, to work out how much you’ll have when you retire and if possible set up a second, private pension to increase your savings.
‘For the vast majority of people the best way to save for the long term is through a combination of pensions and Isas. Pensions provide initial tax benefits but are not flexible, whereas Isas can still provide some tax advantages but are far more flexible if you need to get your hands on your money,’
For bespoke pension and isa advice contact Credencis.
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