Over 40s lack knowledge about how pensions work

The majority of UK adults aged 40 and above do not know what the pension triple lock is while just over half think that the UK’s pension system is too complicated, according to new research by My Pension Expert.

Its survey of 1,295 UK adults aged 40 and above found that when presented with four definitions of the triple lock, only 35% identified the correct one (that the state pension would increase by the annual rate of inflation, average annual UK wage growth, or 2.5%, whichever figure is largest).

Almost two in five (39%) selected the incorrect definition of the three factors that make up the triple lock, while over a quarter (26%) of those surveyed said they were not sure what the triple lock is.

My Pension Expert’s research also showed that half of over 40s do not think that the UK government provides sufficient education and support to help people understand pension policy.

Three in five (62%) over-40s said that they find pension planning daunting, and 69% feel the government needs to do more to improve people’s access to financial guidance and advice.

Lily Megson, Policy Director at My Pension Expert, said: “Preparing for retirement is rarely as straightforward as we’d all like it to be. Sadly, the complexity of our pensions system exacerbates the issue, with changing policies, excessive jargon and insufficient government support leaving savers in the dark as they prepare for the future.

“That so few over-40s know precisely what the triple lock is ought to be a wake-up call to MPs. We need a shift towards greater consistency and clarity when it comes to pension policy – something that would help people plan effectively. This must then be supported through better access to financial education, guidance and advice for everyone.

“Political parties should work more constructively together to deliver genuine cross-party collaboration on boosting financial literacy. Everyone should have access to the right tools to manage their finances and effectively prepare to achieve the retirement they deserve.”

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