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A third of 51- to 60-year-olds have no pension plans

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More than a third (36%) of 51- to 60-year-olds have no pension plans whatsoever, according to the Chartered Institute of Payroll Professionals’ (CIPP) annual survey.

The survey also found that 66% of 20- to 24-year-olds had no pension plans. Almost a quarter (24%) of all respondents said they thought they were ‘too young’ to be thinking about a pension.

Worryingly 30% of all respondents said that they were not sure that their pension pot would be enough to live on once they reach retirement age.

CIPD CEO Lindsay Melvin described the findings as “disturbing”.

He said: “In these uncertain economic times we would hope most people are thinking about their future, but these results show more than a third of those towards the end of their working lives are not planning financially for their retirement, and some are not even sure they will have enough to live on."

Melvin added: “It is clear the nation has a long way to go, but we must also consider the vital role employers play. By educating and offering solutions – such as saving through credit unions and paying into a pension via your payroll – businesses can help their workforce become more financially savvy.

“These problems will not disappear overnight, but if boardrooms take notice of this warning we can all help tackle this ‘sleeping giant’ of a problem.”

The CIPP research coincides with a report from the National Association of Pension Funds (NAPF), which found that 61% of savers over-55 were concerned people might make bad financial decisions and run out of money in retirement as a result of new pensions freedoms.

Despite this, the Understanding Retirement Wave 2: Interim Report found that reactions to the new rules had been mostly positive, with 81% of those aged 55 to 70 seeing pensions freedoms as a great or good idea, and just 11% considering them not such a good, or a bad idea.

NAPF chief executive Joanne Segars said that pensions freedoms have not met the expectations of savers so far. “Consumer expectations in the lead up to the introduction of the reforms were high,” she said. “Savers were enthused by the prospect of accessing their pension ‘like a bank account’, and the press was filled with proclamations of a new dawn for retirement saving."

She added: “Now, four months into the new flexibilities, the story appears to have been less ‘freedom and choice’ and more ‘frustration and captivity’, with media headlines suggesting that savers have struggled to access the freedoms promised.

"We believe that understanding consumer demand and identifying the barriers facing schemes is the key to breaking the pension freedoms deadlock."