Young workers to neglect pension transfer?

Young workers may be the most likely to require pension transfer advice if they are to maximise their savings for later life.

This is because new research from Aviva has found this demographic is the most likely to opt out of the auto-enrolment initiative when it is introduced.

Around 30 per cent of Brits are expected to take this action, with the majority of corporate advisers claiming the majority of these individuals will be under the age of 35.

It was suggested this highlights the importance of engaging with people more effectively over their pension transfer options, particularly those in younger age groups.

Not being able to afford to save was identified as being the key obstacle to this consideration among the young, with 80 per cent of respondents asserting this is the case.

Other financial priorities were cited by 72 per cent, with 69 per cent claiming they are too young to wish to think about their retirement and 63 per cent stating they do not trust the efficiency of pension schemes.

Despite this attitude, it may be advisable to consider planning for when they finish working sooner rather than later, as director-general of over-50s group Saga Dr Ros Altmann recently claimed many Brits leave it too late to start making the relevant preparations.

She warned this approach needs to be challenged if people are to avoid facing poverty in later life, with the state pension described as being increasingly difficult to rely on.

Director of workplace savings for Aviva Paul Goodwin said his firm's research "indicates that there is already a lot of consideration being given to planning for auto-enrolment but, at the same time, more thought still needs to be given to how we engage with employees so that opt-outs are minimised".

"It's good to hear that four in ten advisers are actively trying to stimulate open communications," he continued.

Ashall Glover Financial Services, pension transfer specialists

Posted by Charles Powell