Pensions ignorance among young revealed by Sipps firm

The scale of ignorance about pensions among young people has been revealed by a Sipp firm. Research by Barnett Waddingham suggested that 81% of British 18-29 year-olds don't understand pensions.Some 40% told researchers that they had never heard of auto-enrolment and 33% admitted to having no pension savings at all.There was still widespread lack of knowledge among the older category, with 75% of 30-49 year-olds saying they don't understand pensions either.The majority of 18-29 year-olds said they were more likely to save money for their first home or clear debt over saving into a pension.Barnett Waddingham's Helping Hands survey questioned over 850 members of the public from three age categories, with those aged 18-29 appearing to be the most disengaged with pension saving. {desktop}{/desktop}{mobile}{/mobile} When asked which was the most financially important to them, 49% of 18-29 year olds rated saving for a house as the greatest priority, followed by 41% rating clearing debt, 6% said buying a car, while only 4% of those surveyed rated building a pension as the most financially important to them. Other findings from the Helping Hands survey included: 30-49 year-olds• 75% don't understand pensions• 70% stated that paying off their mortgage was their primary or secondary financial pressure which kept them up at night• Only 4% would be very likely to pay for advice 50+ year-olds• 80% are aware of the new pension freedoms introduced in the 2014 Budget• Two thirds do properly understand their retirement options• 75% do not view their pension investment as safe Damian Stancombe, head of workplace health and wealth at Barnett Waddingham, said: "It cannot escape anyone that a 25 year-old is going to have a fundamentally different view of what's important to a 40 year-old, and again to a 55 year-old."Employers and trustees need to significantly change the way they communicate with each generation regarding saving for retirement. To truly engage, they can no longer communicate collectively across generations when there are particular concerns that will be missed without communicating to individual age groups."It is telling that 18-29 year-olds rated saving for a house and clearing debt significantly above building a pension. A number of survey respondents commented that they didn't see the point in building a pension when they have existing debt to contend with. Ultimately true saving begins with debt management."To tackle the issue of engaging this age group with pension saving, new strategies to help the young clear debt need to be considered by both the government and employers."

Pensions ignorance among young revealed by Sipps firm

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