Crisis? What Crisis? Consumer Attitudes to and Knowledge of Pensions

TABLE OF CONTENTS
CHAPTER 1 INTRODUCTION 13
What is this report about? 13
Who is the target reader? 13
How to use this report 13
Implications of our Findings Error! Bookmark not defined.
CHAPTER 2 PLUGGING THE PENSIONS GAP 15
Background to the discussion 15
CHAPTER 3 WHAT PERCENTAGE OF SALARY DO YOU BELIEVE IS ENOUGH TO SAVE FOR A COMFORTABLE RETIREMENT? 17
Pension status 18
Region 19
Tenure 21
Social class 22
Age 23
Sex 24
Income 25
CHAPTER 4 ARE YOU EXPECTING FINANCIALLY TO BE ABLE TO CONTINUE YOUR EXISTING LIFESTYLE WHEN YOU RETIRE? 27
Sex 28
Age 28
Social Class 30
Tenure 31
Region 32
Pension status 33
CHAPTER 5 WHICH ONE OF THE FOLLOWING STATEMENTS COMES CLOSEST TO DESCRIBING HOW WELL YOU UNDERSTAND THE PENSION MARKET? 36
Age 39
Social Class 41
Tenure 42
Income 44
Region 45
Pension Status 46
CHAPTER 6 AND WHICH OF THESE FACTORS, IF ANY, WOULD MAKE YOU SAVE OR SAVE MORE INTO A PENSION? 47
Sex 48
Age 49
Social Class 50
Tenure 52
Region 53
Pension status 54
Income 55
CHAPTER 8 APPENDIX 57
What percentage of salary do you believe is enough to save for a comfortable retirement? 57
Are you expecting financially to be able to continue your existing lifestyle when you retire? 63
Which one of the following statements comes closest to describing how well you understand the pension market? 69
And which of these factors, if any, would make you save or save more into a pension? 81
Definitions 91
General life & pensions terms 91
Pensions 91
Distribution channels 94
Social class Definitions 96
Region definitions 96
Research methodology 100
Future readings 100
SPP writing team 100
How to contact experts in your industry 101

LIST OF TABLES
Table 1: Saving rates required to retire on half and two-thirds of final salary in 2050, taking account of both state and private income 17
Table 1: What percentage of salary do you believe is enough to save for a comfortable retirement? Total 57
Table 2: What percentage of salary do you believe is enough to save for a comfortable retirement? Pension 58
Table 3: What percentage of salary do you believe is enough to save for a comfortable retirement? Location (1) 58
Table 4: What percentage of salary do you believe is enough to save for a comfortable retirement? Location (2) 59
Table 5: What percentage of salary do you believe is enough to save for a comfortable retirement? Tenure 59
Table 6: What percentage of salary do you believe is enough to save for a comfortable retirement? Class 60
Table 7: What percentage of salary do you believe is enough to save for a comfortable retirement? Age 60
Table 8: What percentage of salary do you believe is enough to save for a comfortable retirement? Sex 61
Table 9: What percentage of salary do you believe is enough to save for a comfortable retirement? Total Household Income (1) 61
Table 10: What percentage of salary do you believe is enough to save for a comfortable retirement? Total Household Income (2) 62
Table 11: What percentage of salary do you believe is enough to save for a comfortable retirement? Total Household Income (3) 62
Table 12: Are you expecting financially to be able to continue your existing lifestyle when you retire? Total 63
Table 13: Are you expecting financially to be able to continue your existing lifestyle when you retire? Sex 63
Table 14: Are you expecting financially to be able to continue your existing lifestyle when you retire? Age 64
Table 15: Are you expecting financially to be able to continue your existing lifestyle when you retire? Class 65
Table 16: Are you expecting financially to be able to continue your existing lifestyle when you retire? Tenure 65
Table 17: Are you expecting financially to be able to continue your existing lifestyle when you retire? Location (1) 66
Table 18: Are you expecting financially to be able to continue your existing lifestyle when you retire? Location (2) 66
Table 19: Are you expecting financially to be able to continue your existing lifestyle when you retire? Income (1) 67
Table 20: Are you expecting financially to be able to continue your existing lifestyle when you retire? Income (2) 67
Table 21: Are you expecting financially to be able to continue your existing lifestyle when you retire? Income (3) 68
Table 22: Are you expecting financially to be able to continue your existing lifestyle when you retire? Pension ownership 68
Table 23: Which one of the following statements comes closest to describing how well you understand the pension market? Total 69
Table 24: Which one of the following statements comes closest to describing how well you understand the pension market? Sex 70
Table 25: Which one of the following statements comes closest to describing how well you understand the pension market? Age 71
Table 26: Which one of the following statements comes closest to describing how well you understand the pension market? Class 72
Table 27: Which one of the following statements comes closest to describing how well you understand the pension market? Tenure 73
Table 28: Which one of the following statements comes closest to describing how well you understand the pension market? Total household income (1) 74
Table 29: Which one of the following statements comes closest to describing how well you understand the pension market? Total household income (2) 75
Table 30: Which one of the following statements comes closest to describing how well you understand the pension market? Total household income (3) 76
Table 31: Which one of the following statements comes closest to describing how well you understand the pension market? Total household income (4) 77
Table 32: Which one of the following statements comes closest to describing how well you understand the pension market? Location (1) 78
Table 33: Which one of the following statements comes closest to describing how well you understand the pension market? Location (2) 79
Table 34: Which one of the following statements comes closest to describing how well you understand the pension market? Pension 80
Table 35: And which of these factors, if any, would make you save or save more into a pension? Total 81
Table 36: And which of these factors, if any, would make you save or save more into a pension? Sex 82
Table 37: And which of these factors, if any, would make you save or save more into a pension? Age 83
Table 38: And which of these factors, if any, would make you save or save more into a pension? Class 83
Table 39: And which of these factors, if any, would make you save or save more into a pension? Tenure 84
Table 40: And which of these factors, if any, would make you save or save more into a pension? Location (1) 85
Table 41: And which of these factors, if any, would make you save or save more into a pension? Location (2) 86
Table 42: And which of these factors, if any, would make you save or save more into a pension? Pension Type 86
Table 43: And which of these factors, if any, would make you save or save more into a pension? Income (1) 87
Table 44: And which of these factors, if any, would make you save or save more into a pension? Income (2) 88
Table 45: And which of these factors, if any, would make you save or save more into a pension? Income (3) 89
Table 46: And which of these factors, if any, would make you save or save more into a pension? Income (4) 90


LIST OF FIGURES
Figure 1: 5-10% of salary is judged by many to be the right amount to save for retirement (Total) 18
Figure 2: Those with stakeholder pensions are particularly keen on a 5-10% contribution rate 19
Figure 3: People in Wales are the keenest of all the regions in investing 10% of salary to save for retirement 21
Figure 4: Those renting from the local authority are most inclined to believe that saving is not worthwhile 22
Figure 5: The C2 class is more likely to feel that saving is not worthwhile 23
Figure 6: The retired now realize the importance of saving a high percentage of salary 24
Figure 7: Many more men than women believe that saving for retirement is not worthwhile 25
Figure 8: Those earning over £35,000 are keen on a 10% plus contribution rate 26
Figure 9: 59% of people expect financially to be able to continue their existing lifestyle when they retire 27
Figure 10: The sexes show equal confidence in their retired futures 28
Figure 11: A high number of those 65+ think themselves able to carry on their existing lifestyle once they have retired 30
Figure 12: All classes expect to be able to continue their existing lifestyle when retired 31
Figure 13: Those renting from the local authority are uncertain of their financial future 32
Figure 14: The Welsh are the most certain of their post retirement future 33
Figure 15: Those with no pension remain confident about their future after retirement 34
Figure 16: 20% of people have no knowledge or interest in pensions 37
Figure 17: More men claim a good understanding of pensions than women 39
Figure 18: 18-24 year olds have a low interest in pensions 40
Figure 19: Knowledge of pensions is broadly on a sliding scale according to social class 42
Figure 20: Those renting from the local authority have least interest in the pension market 43
Figure 21: Those with a household income above £50,000 are far more interested in pensions than those in the £9,500 to £19,999 bracket 44
Figure 22: The Welsh interest in pensions contrasts sharply to those in the East Midlands 45
Figure 23: Over 60% of those with a stakeholder pension count themselves as having a good or strong knowledge of the pensions market 46
Figure 24: Wage increases would be the key factor in driving increased willingness to contribute to pensions 48
Figure 25: Women are more resistant to pensions than men are 49
Figure 26: Younger people in particular feel bereft of advice and information on pensions 50
Figure 27: The DE social class are particularly shut out of the pensions debate 51
Figure 28: Those homeowners paying off a mortgage are particularly conscious of the cost of pensions 53
Figure 29: The North is particularly keen on cheaper pensions 54
Figure 30: Many of those with no pension remain unlikely ever to get one 55
Figure 31: Those earning above £50,000 see tax incentives as key to encouraging pensions saving 56