A recent consumer survey undertaken by Friends Provident found that two-thirds of Brits have little or no faith in the Government when it comes to pensions. This sentiment comes as no real surprise in the current climate and echoes similar findings from Defaqto’s Retirement Savings & Income Report 2007.
Defaqto asked1 1,065 UK consumers which political party they trusted to solve the pensions problem. Although at the time Labour (25%) were more trusted than the Conservatives (12%) and Liberal Democrats (4%), the resounding result was that 57% trusted none of the political parties to solve the pensions problem.
Although a particular stance on pension policy could be seen as a vote winner for an individual party it would seem that it is high time for all parties to work together towards improving trust in Government and its prescribed pensions system. Particularly when the long-term commitment required to deliver consistent pension policy is taken into account.
When asked how they would solve the problem of people having inadequate savings for their retirement and relying solely on the basic state pension, one-third of the consumers in Defaqto’s sample felt that it should be compulsory for everyone who works to contribute to a personal pension plan.
This is a sign that consumers have a growing awareness of the fact that serious action needs to be taken, even in the form of compulsory pension contributions which may previously have been viewed as an unpalatable solution.
Perhaps auto-enrolment into Personal Accounts is a stepping stone but the Government will still be under pressure to deliver this initiative on time and provide proof positive to the general public that it is better to save for retirement via this national scheme than rely on state benefits. By working together and putting out consistent messages the parties may have more chance of meeting these objectives.
1Research carried out for Defaqto by GfK NOP from 30th August to 4th September 2007
