Nearly A Half Of Average Or Below Average Earners Have Not Heard Of Stakeholder Pensions

Research on behalf of Norwich Union, the UK's largest insurer, into stakeholder pensions shows that:

• Only just over a half of people earning between 16310,000 and 16325,000 a year say they've heard of stakeholder pensions. Of those who have heard of stakeholder, the majority have heard about them via the television.
• Awareness of stakeholder increases in relation to earnings, with the result that more than eight out of ten people earning over 16350,000 a year have heard of stakeholder pensions, whereas only just over three out of ten earning less than 16310,000 a year have heard of them.
• Two thirds of people earning between 16310,000 and 16325,000 a year say they're 'unlikely' to consider taking out a stakeholder pension in the future, despite the fact that more than half of them have no other pension arrangements.
• Despite this, more than nine out of ten people earning between 16310,000 and 16325,000 a year say they believe that planning for your retirement is important.

Commenting, Jerry Barnfield, director of pensions development at Norwich Union said: "This research suggests that the benefits of stakeholder pensions are more familiar to the better off than to those on average or below average earnings, where nearly a half say they've not heard of them. This is a worry, because for a great many of them, stakeholder might well be a suitable savings option."

"The good thing is that the message has now got through to most people that planning for your retirement is vitally important, even if this has not yet resulted in sufficient numbers of those on more modest incomes being stirred into doing something about it."

"We will continue to work with Government to promote stakeholder as a secure, flexible and value-for-money way for many people to plan for their retirement."

The key findings of the research were:

Awareness of stakeholder

The following proportion of people said they were aware of stakeholder pensions:

Likelihood of taking out a stakeholder pension

When asked if they would be likely to consider taking out a stakeholder pension in the future, most people said 'unlikely', as follows:

This is despite the fact that only a minority of people on average or below average incomes say they have existing/alternative pension arrangements in place:

Importance of planning for retirement

The research does highlight the importance that people now place on planning for their retirement, regardless of income:

Some additional findings from the research were:

Low earners

• Whilst 84% of people earning less than 16310,000 a year feel that it is important to make adequate provision for retirement, 79% of them said they were either 'very unlikely' (71%) or 'fairly unlikely' (8%) to consider taking out a stakeholder pension. Of these:
• 34% offered a genuine reason why (for example, 'I am happy with my current pension arrangements', 'I am already in a company scheme' or 'I'm happy with the other arrangements I have').
• 18% said they 'hadn't really thought about it', 22% said they 'couldn't afford it', 14% said they 'didn't know enough about them' and 3% said they'd 'rather spend the money on other things'.
• Only 9% of people in this category said they WERE likely to consider taking out a stakeholder pension, and of these only 48% would consider themselves 'likely' to do so in the next 12 months.
• Only 1% of people interviewed said they had already taken out a stakeholder pension.

Average or below average earners

• Whilst 93% of people earning between 16310,000 and 16325,000 a year feel that it is important to make adequate provision for retirement, 69% of them said they were either 'fairly unlikely' (13%) or 'very unlikely' (56%) to consider taking out a stakeholder pension. Of these:
• 60% offered a genuine reason why (for example, 'I am happy with my current pension arrangements', 'I am already in a company scheme' or 'I'm happy with the other arrangements I have').
• 14% said they 'hadn't really thought about it', 12% said they 'couldn't afford it', 9% said they 'didn't know enough about them' and 2% said they'd 'rather spend the money on other things'.
• 17% of people in this category said they WERE likely to consider taking out a stakeholder pension in the future, of which 60% would consider themselves 'likely' to do so in the next 12 months.
• Only 1% of people said they had already taken out a stakeholder pension.

Middle income earners

• Whilst 95% of people earning between 16325,000 and 16350,000 a year feel that it is important to make adequate provision for retirement, 74% of them said they were either 'fairly unlikely' (12%) or 'very unlikely' (62%) to consider taking a stakeholder pension out. Of these:
• 78% offered a genuine reason why (for example, 'I am happy with my current pension arrangements', or 'I am already in a company scheme' or 'I'm happy with the other arrangements I have').
• 8% said they 'hadn't really thought about it', 6% said they 'couldn't afford it', and 5% said they 'didn't know enough about them'.
• 15% of people in this category said that they WERE likely to consider taking out a stakeholder pension, of which 64% would consider themselves 'likely' to do so in the next 12 months.
• Only 2% of people said they had already taken out a stakeholder pension.

High income earners

• Whilst 96% of people earning over 16350,000 a year feel that it is important to make adequate provision for retirement, 74% of them said they were either 'fairly unlikely' (16%) or 'very unlikely' (58%) to consider taking a stakeholder pension out. Of these:-
• 82% offered a genuine reason why (for example, 'I am happy with my current pension arrangements', or 'I am already in a company scheme' or 'I'm happy with the other arrangements I have').
• 6% said they 'hadn't really thought about it', 3% said they 'couldn't afford it', and 4% said they 'didn't know enough about them'.
• 15% of people in this category said that they WERE likely to consider taking out a stakeholder pension, of which 65% would consider themselves 'likely' to do so in the next 12 months.
• 3% of people said they had already taken out a stakeholder pension.

Technical details

Norwich Union subscribes to the study conducted by MORI Financial Services (MFS). The survey is continuous with 2,000 interviews a month, conducted face-to-face in the home. The data in this release was collected between September and December 2001.