It’s official – employer-based pension schemes are considered the ‘safest’ way to save for retirement and workers’ confidence in them is increasing. For any employer running a workplace pension scheme, whether recently established for auto enrolment or a plan that has been in place for years, these findings from the Office for National Statistics (ONS) will come as a welcome affirmation that they are putting their staff’s financial future in safe hands.
Workplace pension, the ‘safest’ way to save for retirement – also according to the majority of the public
ONS data published in June shows that confidence in pensions is growing, with 40 per cent of a sample of 20,000 individuals seeing workplace pensions as the “safest” option in the period July 2012 to June 2014. That is a considerable increase on the 35 per cent that did in the period July 2010 to June 2012.
The public see workplace pensions as the safest way to save for retirement by a considerable margin, with just 28 per cent seeing property as the safest bet, while just over 10 per cent prefer ISAs and personal pensions.
Auto enrolment’s part in the changed perception of pension
This rising confidence suggests that auto enrolment is being well received by the nation’s workers, and that moves to clean up workplace pensions are at last starting to have an effect in improving trust in them.
Trust has been a challenge for pensions for decades, and these rising approval levels are worth putting in context. For years, pensions have been in the headlines for all the wrong reasons – Robert Maxwell’s theft from the Mirror Pensions Scheme back in 1991, the pensions mis-selling scandal of 1988 to 1994, the Equitable Life debacle and the collapse of underfunded final salary pension schemes have all taken their toll on pensions’ reputation. Now, as millions more people are being brought into long-term retirement saving, it appears that public opinion is turning back in pensions’ favour.
At NOW: Pensions we believe this re-emergence of workplace pensions as a trusted home for long-term savings hasn’t just happened all by itself. We think auto enrolment has forced politicians and providers to look long and hard at how pensions work, and have been forced to raise standards.
We also believe we have been at the forefront of raising standards, with the express view of increasing trust in workplace pensions.
Our commitment to building trust in pensions goes back to the early months of the auto enrolment project, when in April 2013 we were the first master trust to earn the Pension Quality Mark Ready accreditation from the National Association of Pension Funds. In January of this year we also became one of the first schemes to meet the Pension Regulator’s new master trust assurance framework reporting requirements.
At NOW: Pensions we understand that trust is essential if we are to expect savers to trust us with their money. The good news is that the message, that workplace pension schemes are the most effective and efficient way to save for retirement, appears to be getting through.