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Trust in pensions lags behind faith in banks

Paper mountain 010514.jpgBanking 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.

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. ‘consumers are not getting the information they need to make good retirement income decisions”.

    This quite disingenuous.

    Never has so much information been available to so many. The good decisions come from taking advice but that advice costs.

  2. Same record lack of trust in advisers and products When are which going to change the record

  3. How can you compare a Service, that of providing a Bank Account for day to day Banking, its all I would use them for, against a Product, which has been altered, by successive governments, abused by the Press, The regulator has no idea, over the years the public have been pushed by political ideologies as a punch bag, Setting aside assets throughout our working life, should be based upon individual aspiration and realistic affordability, The Employer should NOT have any input to it, they should however pay a proper wage, “Minimum Wage”” what ever that is! and the Income enjoyed in retirement is completely down to one’s own life style, The State, should and is providing a Base Retirement Income, anything in addition should be from your own resources. And stop any Additional State Benefits. And lastly, as for the Banks, add up the Fines over the past few years, add up the compensation over the same years, and then ask! Who or What is really driving the economy, its not called productivity

  4. Agree with Derek Bradley ~ and more. The (many) problems are:-

    1. too much information,

    2. the difficulty for lay folk in understanding and comparing all the different options (even just on annuities),

    3. the government’s ceaseless and prejudicial meddling and tinkering with the pensions framework,

    4. sustained low annuity rates (which could be solved by special issues of enhanced rate gilts available only to annuity funds),

    5. reluctance to pay for professional advice,

    6. ignorance of the Advice Allowance,

    7. the number of providers claiming not to be able to facilitate it (which could be solved by making it a mandatory facility),

    8. providers still being allowed to quote their own (usually uncompetitive) annuities). They should be allowed to quote only those based on enhanced rates built into the contract (GAR’s).

    9. The government’s unwillingness to mandate OM as the default option.

    10. The hangover from the past of poor value pension plans (which hasn’t been solved just by beating every ounce of profit margin out of them with stakeholder plans, on which the levels of service provided are almost non-existent).

    Have I missed anything?

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