Barclays recently carried out a survey of people with pensions that had not yet retired. The question posed was simple - "How much income can you expect from your pension when you retire?"
Over 1,000 people were surveyed with this question and the number of people that had no idea was 51%.
75% of people admitted receiving a pension statement but 20% of them did not understand what they had received.
People were also questioned about what they would do if their pensions looked to return less than the income needed in retirement. 35% of people said they would increase their payments but only 2% said they would take advice to get their pensions back on track.
Our View
After looking at the outcome of this survey, we believe that the figure of 51% is too low as people do assume what their pensions will pay out, rather than checking for definite.
The problem with pension statements not being understandable has been highlighted yet again but the worrying part is that people tend to do nothing, rather than taking advice. There are masses of pensions out there that are out-dated and very expensive. For those 35% that would just increase their payments, they could be throwing away good money after bad.
Our view is that people should seek advice or at least some guidance. There is no point paying a lot of money into a pension that is not competitive and not doing what you need it to.
Learn more about pensions in the Pensions Adviser.com .
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