Two-thirds of workers concerned about pensions adequacy

Most employees still see a pension as the best way to save for retirement but only a third are confident it will provide an adequate income, according to research.

The National Association of Pension Funds' (NAPF) Workplace Pensions Survey - which polled 1,248 UK employees - revealed 44% of people believed pensions were the best way to save for retirement - compared with 18% who favoured property; 10% ISAs; 7% a bank account; and 3% other.

However, the survey also revealed only a third of employees were confident their pension would provide enough money in retirement.

Just over a quarter say they would have more confidence in pensions if they were sure they would not lose any of the money paid in.

And 26% would like a guarantee their pension income would not run out before they died - something which the NAPF believed suggested compulsory annuitisation was in line with individuals' wishes.

Pensions also came out as the most important employee benefit on top of basic salary, with 38% of respondents opting for this - 19% said a bonus, 13% flexible working, 10% generous holiday, and 9% health insurance.

Over three-quarters of employees say they would consider an employer who offered a workplace pension more positively than one who does not.

The survey also revealed 17% of people saving in a pension scheme intend to increase their contributions over the next year, compared with 8% that intend to reduce or stop contributions - the remainder do not intend to make any changes.

NAPF head of policy Nigel Peaple says: "It is clear that people greatly value pensions. They consider pensions to be the best way to save for retirement - far ahead of property - and over three quarters value an employer more if they offer a workplace pension.

"People want their pension to provide them with certainty, in particular they want to be sure they won't lose money."