Study highlights pension illiteracy in UK

Retirement_shortfallOne in ten of all people in the UK aged 18 to 24 and with jobs do not know what a pension is and how it works, with women understanding less than men, according to research from the Chartered Institute for Securities and Investment (CISI).

A quarter of those in work aged 55 or over knew what a pension was but not how one worked.

The UK-wide omnibus study surveyed over 2,000 people about their attitudes, knowledge and behaviour towards pensions.

Of those workers who were contributing to a pension, over half of those surveyed did not know how much money they were paying into their pension each month, while three quarters of respondents said they did not know the value of their fund, with significantly more women (80%) than men (72%) not knowing.

Over a third of respondents said they never checked the status of their pension account.

Over half of all workers with a pension were interested in investments in community over 60% were interested in investments in environmental projects. This social conscience indicator was higher amongst women than men and higher among 18-to-24 year-olds than in those aged 55 or over.

Clive Shelton, chairman of the Tax Incentivised Savings Association, said: “This survey offers important insights around the issue of financial capability and adds to the evidence that a high percentage of individuals do not understand pensions or tax relief benefits.”

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