Banking services are trusted by consumers more than long-term savings products like pensions, a consumer group survey has found.
Just 23 per cent of consumers polled by Which? said they had faith in pensions, compared to 30 per cent for energy companies an 40 per cent for day-to-day banking, the Financial Times reports.
Which? money expert Gareth Shaw tells the paper: “We’ve found that trust in longer-term financial products — such as pensions — is worryingly low and that consumers are not getting the information they need to make good retirement income decisions.
“This lack of trust combined with a pension ‘knowledge gap’, leaves consumers disengaged and lacking detailed knowledge about the pension options available to them.”
The Which? survey of 255 people who had taken advantage of the pension freedoms to access their savings also shows that low levels of trust in pensions fed through to low levels of shopping around as consumers felt they would not stand to gain from a move but could risk losing out.
Evestor chief executive Anthony Morrow says: ” “The Which? findings support what we have thought for a long time; that unless you have a large sum of money, you are left to make retirement decisions on your own with no guidance or support. It’s no wonder people don’t trust pensions. However, the issue doesn’t sit with the product, it sits with the providers – often fat cats not providing the right service or advice.”
A study by the FCA last month showed that when people did cash in their pensions, more than half were simply moving the money into an alternative savings like a current account.