Worker Understanding of Pensions 'Must Improve'

More than one in four Britons are completely unaware of pension tax relief, new research has shown.

The workplace savings research, released by the National Association of Pension Funds (NAPF), also found that 22 per cent of workers in the UK did not know what their employer's contribution rates to their workplace pension were. Accordingly, NAPF has issued a call for bosses to try harder to improve employees' understanding of workplace pension schemes.

Giving the workers "simple" and "regular" updates on the status of their savings was recommended by the body, particularly for those workers who had not yet joined their company's scheme.

Director of policy at NAPF Nigel Peaple said: "The lack of understanding of tax relief and employer contributions presents an opportunity to boost retirement savings of the British workforce. Through regular and jargon-free communication, employers and the pensions sector have the opportunity to re-emphasise the benefits of workplace pensions."

He added: "Addressing this knowledge gap could be a quick win."

The NAPF research was also released in the wake of the government's announcement that, under the terms of the new Pension Bill, firms would be banned from offering workers financial inducements to opt out of their corporate pension plans in order to save money.