Company pensions is one employee benefit that has left the British public confused. This is worrying because pensions are central to the retirement of the majority of the population.

The revelation could explain the failing pension saving culture where a large proportion of people have chosen not to save toward their retirement, leaving many with the state pension as their only form of income.

Modern living

A study carried out by Towers Watson found that when members of the public were asked about which aspects of modern living they were most baffled by, many confessed that pensions were the most confusing. The Government is working to reform pensions in order to get more people saving. However, this is being resisted by public sector unions who feel the changes are unfair.

When looking at where pensions fell in the complete list, in which employee benefits did feature, rather shockingly pensions were considered to be much more confusing than train fares. The research revealed that many felt completely in the dark when thinking of the difference between life insurance and life assurance.

The list included a wide range of subjects from Algebra, computers to credit card interest rates, but it did expose the worrying fact that those people who need to be encouraged to save are not understanding the products.

The issue with saving was also pointed out late last year when Andy Zanelli, head of technical sales at Axa Wealth, said that ‘the vast majority of people do not understand the value of what they are giving up’.

Education should start in school

Making sure that both customers and potential customers are made aware of the products and what they can offer will allow for greater penetration of these retirement products into society.

Zanelli went on to suggest that education should begin when these people are in school, in the PSHE (Personal Social Health & Economics) class as his concern is children are not learning anything about finance.

Making sure the younger generation are given ample opportunity to learn skills that may benefit them in the future is not a flawed idea. In fact along with parents forming a saving culture it maybe a solution for the current saving problems.

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