'Confidence crisis' in pensions

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Some people are not saving enough for their retirement because of a lack of confidence in pension investments, a survey has suggested.

Some 71% of those asked said they were scared about making the wrong decision, compared with 47% who said they did not know enough about what to do.

The survey was conducted at the start of a major campaign to raise awareness of a new pensions system.

Millions of people will be enrolled into workplace pensions from October.

'Lack of saving'

The automatic enrolment system, which will be phased in over six years, aims to boost the low level of pension savings among UK workers, especially in the private sector.

The government intends that between four and eight million more workers will be recruited into existing company schemes, or alternatives such as the National Employment Savings Trust (Nest).

Auto-enrolment criteria

  • Most workers will be enrolled if they are aged between 22 and the state pension age
  • However, these workers must be earning at least £8,105 a year
  • Pensionable earnings will be those between £5,564 and £42,475
  • Staff need not join Nest if they are recruited instead to another scheme that meets minimum standards
  • They can opt out

This will apply automatically to workers who are at least 22 years old but below their state pension age, and who earn more than £7,475 a year, unless they are already in a workplace pension scheme or they opt out.

The awareness campaign, called "Tomorrow is worth saving for", aims to use social media to show the benefits for retirement of saving earlier in life.

"Too many people are putting off setting money aside for their later lives because they do not know what to do or do not want to think about retirement," said Tim Jones, chief executive of Nest.

"Our findings show we must use this opportunity to build up their confidence."

A recent survey by Scottish Widows suggested that 22% of those aged between 30 and state pension age and who earned at least £10,000 a year were not saving anything for retirement.

The pension provider, which questioned 5,200 UK adults, said this figure had grown from 20% a year ago.

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