The research, undertaken in collaboration with Boring Money, investigates four tribes of people usually criticised for not saving enough. It finds that retirement matters for ’Rebellious Renters‘ trying to save for their first property, ’Tired Parents‘ juggling numerous demands, ’Ladies Losing Out‘ prioritising happiness in later working life, and the ’Sandwich Man‘ caught between providing financial support for elderly parents and his own adult children.
The research shows 65% of ‘Rebellious Renters’ either have not heard of the current system of pension tax relief or do not understand it. However, more than a quarter (27%) point to the statement "If you save £80 into a pension, the Government pays in £20 for free" as most likely to motivate them to save. Over a fifth of ‘Tired Parents’ (25%), ‘Ladies Losing Out’ (21%) and ‘Sandwich Man’ (22%) tribes also say this statement is most likely to convince them to save more.
Mind the (Gender) gap
The research also reveals that awareness of pensions diverges between genders across all four tribes. The difference is particularly stark for ‘Tired Parents’, with 42% of male respondents both having a workplace pension and knowing how much is in it, compared to just 22% for females.
Among ‘Rebellious Renters’, 30% of men have a workplace pension and know how much is in it, compared to 20% of women; similarly, nearly half (46%) of the ‘Sandwich Man’ tribe have a workplace pension and know how much is in it, versus just a third (33%) of ‘Ladies Losing Out’. While these differences can be partially explained by the fact that a lower number of women have a workplace arrangement (78% versus 61%), the difference remains significant.
Pensions (IM)possible ?
Polling almost 5,000 consumers, the research also finds that each group is more likely to continue to save, or save more, into a private pension than a stocks and shares ISA. Overall, half of respondents say they are likely to save or continue to save into a private pension, compared to a fifth (21%) who would consider a stocks and shares ISA.
For those people who are not saving, most are not doing so because they feel they do not have enough money to save.
‘Ladies Losing Out’ is the tribe most likely not to be saving for retirement. Almost half of respondents in this tribe (48%) say they are unlikely to save into a private pension and a third (34%) do not have a workplace pension.
Emma Douglas, head of DC at LGIM (photo, top-right), says: “Whilst it is encouraging to see that saving for retirement is important for each of these groups, we now need to motivate people to become more active about doing so.
As an industry, we also need to do a better job of raising awareness about the benefits of pension tax relief.”
“Our survey found that 27% of ’Rebellious Renters‘ would like an income of over £20,000 for a comfortable retirement.
Factoring in the full level single-tier state pension*, they would need to save at least £200 a month** in combined contributions from employer and employee to meet this goal.”
Holly Mackay, founder and CEO at Boring Money, says: “Surely tax relief is one of the great benefits of a pension, yet all our focus groups and consumer research tell us that this remains poorly understood across all age brackets.
Although we are firm advocates of talking to financial tribes about their particular stages in life, we can see that this is one message which resonates loud and clear across all segments, and one we think the industry should make clearer.”
|
