Employers are being urged to explain “confusing” pension rules after a report found that 53% of millennials struggle to understand their workplace schemes.
On a positive note, close to seven out of 10 under-35s are currently saving into work or personal pension plans, according to pension provider Prudential’s report. This was based on a survey carried out by data analytics company Consumer Intelligence.
In spite of the uptick in millennials engaging with their pensions, more than half would like their employer to do more to explain how pensions and their benefits work. Close to a quarter (24%) say they find pension rules very confusing.
Vince Smith-Hughes, pensions expert at Prudential, says: “Rules can be confusing, especially when you are early in to your career. Employers can help to ensure they provide information and support around their workplace scheme.”
Mr Smith-Hughes welcomes the fact that millennials recognise the need to prioritise pension savings, despite pressure to get onto the housing ladder and pay off student debt.
“Millennials are as responsible as other generations when it comes to pensions and the talk about ‘Generation Snowflake’ feeling entitled to an easy life is not true.”
The survey revealed that almost a quarter (23%) of young people believe their current pension contribution is not high enough, while one in four (24%) admit they have no pension fund at all.
For those who do have a pension, close to 23% say they do not know if they are on target to have enough money during retirement. Meanwhile, three in 10 do not feel confident about managing their finances.
Looming pensions crisis
Kim Lerche-Thomsen, chief executive of Primetime Retirement, a provider of fixed term retirement plans, says his firm’s research shows the over-55s would also like to receive more information about pensions. It found that 27% of this age group want more resources to be made available to help people to make decisions about their retirement savings.
“With more and more people going into retirement with insufficient savings and Prudential’s research suggesting that some people may only have the state pension to rely on, we are facing a looming pensions crisis in the UK,” Mr Lerche-Thomsen adds.
Millenials "confused" by pension rules? And the rest of us!
Where's the flow chart?
To flexible draw down, or not to flexible draw down, that is the question. Whether tis nobler to 'go full draw down before hitting the lifetime limit?'
Perhaps the government Pension Wise site will help, or a "notoriously accurate HMRC help advisor?"