Two-thirds of Brits think the state pension won’t exist when they retire
More than 70 per cent of working-age Britons think the state pension will not exist in its current form when they or their children come to retire – but the majority still would not pay into someone else’s pension.
This is according to research from adviser platform Nucleus, which revealed 71 per cent of people aged 18 and above believe the state pension will not exist or will be less generous when they retire.
Carried out among 2,100 UK adults aged 18 and over, the representative survey found women tended to be more doubtful about whether the benefit will be around in years to come.
This is despite women being more likely to have to rely on it more heavily in their retirement as a result of the 35 per cent pension gap between men and women.
According to Nucleus, concerns over the personal/workplace pension gap and fears over a worse state pension entitlement in the years to come should encourage people to do more to shore up their personal pensions.
“Families could be missing out on a more comfortable retirement if they are not aware of the possibility of paying into someone else’s pension”.
Laura Barnes, Nucleus
However, the research found 76 per cent of respondents were unaware they can pay money into someone else’s pension.
When informed about this, 21 per cent said they were more inclined to think about adding to another person’s pension instead of or in addition to their own.
Third-party contributions can be a useful financial planning tool particularly for someone who has taken a career break – such as to raise young children or care for elderly relatives. In the majority of cases, the caring roles are taken up by women, which is significant contributing factor to the gender pension gap.
Laura Barnes, director of business development at Nucleus, said: “Sadly third-party pension contributions appear to be a closely guarded secret.
“Families could be missing out on a more comfortable retirement if they are not aware of the possibility of paying into someone else’s pension or receiving contributions from another person.”
She added: “Generally speaking, a greater number of women could see their retirement prospects improve if the family unit considers third-party contributions.
“Often caring roles have fallen to women in the past and this has impacted their earning power either because of working part-time or giving up work entirely.
“Instead of no private pension contributions being made by individuals during such times, another person – most commonly a partner or spouse – could fund a pension for them.”
The Nucleus study also found more women (79 per cent) than men (74 per cent) were unaware about the possibility of paying into someone’s pension and a higher proportion of female respondents were less likely to consider doing it.
Some 24 per cent of men who did not know said they would consider making third-party contributions, whereas the figure dropped to 19 per cent for women.
If you would like to discuss how you can make additional pension contributions for a spouse or partner, child or grandchild or even for yourself please get in touch.
info@brookswealth.co.uk 01733 314553 www.brookswealth.co.uk