25% of workers without pension

One in four workers are not paying money into pension schemes, not because they can’t afford it, but because they are afraid that they will lose their investment.

A RedC survey of over a thousand adults has found that 25% of respondents were unwilling to invest in a long-term pension plan because they felt they could lose their money. The survey also revealed that almost 20% of respondents felt that pensions were too complicated to understand.

A combination of fear of loss, complexity and trust combined to dissuade 57% of people from investing in savings for their retirement.

Marketing director of Independent Trustee Company, Michael Keyes, said: “As the results show us, a fear of losing money is a real concern for many people when it comes to pension investment. The overwhelming message to be gleaned from these results is that issues like security, transparency and trust are at the forefront of the minds of the Irish public.”

Mr Keyes said pensions have always been hard to sell because there is no instant return to the buyer. Pensions have also in the past been complicated financial instruments that have lacked transparency.

He said people want simple products: “Our experience with clients has reflected the findings — people are looking for greater understanding as to the working of their pensions. They want to be able to see exactly where their money is going and they want the control and flexibility to change their investments.”

The change of funding requirements resulting in 80% of defined benefit schemes being technically insolvent has fuelled consumers fears about the long term viability of pension schemes.

The phasing out of high profile defined benefit schemes such as those in AIB and Independent News and Media has dented consumer confidence in pension schemes.