Nearly half of average or below average earners have not heard of stakeholder pensions

Article date: 10 April 2002

Research on behalf of Norwich Union, the UK’s largestinsurer, into stakeholder pensions shows that:

  • Only just over a half of people earning between £10,000 and£25,000 a year say they’ve heard of stakeholder pensions. Ofthose who have heard of stakeholder, the majority have heard aboutthem via the television.
  • Awareness of stakeholder increases in relation to earnings,with the result that more than eight out of ten people earningover £50,000 a year have heard of stakeholder pensions, whereasonly just over three out of ten earning less than £10,000 a yearhave heard of them.
  • Two thirds of people earning between £10,000 and £25,000 ayear say they’re ‘unlikely’ to consider takingout a stakeholder pension in the future, despite the fact thatmore than half of them have no other pension arrangements.
  • Despite this, more than nine out of ten people earning between£10,000 and £25,000 a year say they believe that planning for yourretirement is important.

Commenting, Jerry Barnfield, director of pensions development atNorwich Union, said: “This research suggests that thebenefits of stakeholder pensions are more familiar to the betteroff than to those on average or below average earnings, wherenearly a half say they’ve not heard of them. This is a worry,because for a great many of them, stakeholder might well be asuitable savings option.

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

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

Press office contacts:

James Evans, head of media relations 08703 66 68 78 Out of hours7790 487105 Ian Beggs, media relations manager 08703 66 68 71 Outof hours 7790 487533

Notes to editors

The key findings of the research were:

Awareness of stakeholder

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

Earnings% Who Say Yes They’re Aware of StakeholderPensions
Less than £10,00034%
£10,000 to £25,00057%
£25,000 to £50,00075%
Over £50,00084%

Likelihood of taking out a stakeholder pension

When asked if they would be likely to consider taking out astakeholder pension in the future, most people said‘unlikely’, as follows:

Earnings% Who Say They’re ‘Unlikely’ To Consider AStakeholder Pension In The Future
Less than £10,00079%
£10,000 to £25,00069%
£25,000 to £50,00074%
Over £50,00074%

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

Earnings% Who Say ‘No’ They Wouldn’t ConsiderStakeholder Because They Already Have Pension Arrangements
Less than £10,00029%
£10,000 to £25,00043%
£25,000 to £50,00048%
Over £50,00050%

Importance of planning for retirement

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

Earnings% Who Feel It Is Important To Plan For Your Retirement
Less than £10,00084%
£10,000 to £25,00093%
£25,000 to £50,00095%
Over £50,00096%

Some additional findings from the research were:

Low earners

  • Whilst 84% of people earning less than £10,000 a year feelthat 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 outa stakeholder pension. Of these:
    • 34% offered a genuine reason why (for example, ‘I amhappy with my current pension arrangements’, ‘I amalready in a company scheme’ or ‘I’m happywith the other arrangements I have’).
    • 18% said they ‘hadn’t really thought aboutit’, 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 otherthings’.
    • Only 9% of people in this category said they WERE likely toconsider taking out a stakeholder pension, and of these only 48%would consider themselves ‘likely’ to do so in thenext 12 months.
    • Only 1% of people interviewed said they had already takenout a stakeholder pension.

Average or below average earners

  • Whilst 93% of people earning between £10,000 and £25,000 ayear feel that it is important to make adequate provision forretirement, 69% of them said they were either ‘fairlyunlikely’ (13%) or ‘very unlikely’ (56%) toconsider taking out a stakeholder pension. Of these:
    • 60% offered a genuine reason why (for example, ‘I amhappy with my current pension arrangements’, ‘I amalready in a company scheme’ or ‘I’m happywith the other arrangements I have’).
    • 14% said they ‘hadn’t really thought aboutit’, 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 otherthings’.
    • 17% of people in this category said they WERE likely toconsider taking out a stakeholder pension in the future, ofwhich 60% would consider themselves ‘likely’ to doso in the next 12 months.
    • Only 1% of people said they had already taken out astakeholder pension.

Middle income earners

  • Whilst 95% of people earning between £25,000 and £50,000 ayear feel that it is important to make adequate provision forretirement, 74% of them said they were either ‘fairlyunlikely’ (12%) or ‘very unlikely’ (62%) toconsider taking a stakeholder pension out. Of these:
    • 78% offered a genuine reason why (for example, ‘I amhappy with my current pension arrangements’, or ‘Iam already in a company scheme’ or ‘I’m happywith the other arrangements I have’).
    • 8% said they ‘hadn’t really thought aboutit’, 6% said they ‘couldn’t afford it’,and 5% said they ‘didn’t know enough aboutthem’.
    • 15% of people in this category said that they WERE likely toconsider taking out a stakeholder pension, of which 64% wouldconsider themselves ‘likely’ to do so in the next 12months.
    • Only 2% of people said they had already taken out astakeholder pension.

High income earners

  • Whilst 96% of people earning over £50,000 a year feel that itis important to make adequate provision for retirement, 74% ofthem said they were either ‘fairly unlikely’ (16%) or‘very unlikely’ (58%) to consider taking a stakeholderpension out. Of these:-
    • 82% offered a genuine reason why (for example, ‘I amhappy with my current pension arrangements’, or ‘Iam already in a company scheme’ or ‘I’m happywith the other arrangements I have’).
    • 6% said they ‘hadn’t really thought aboutit’, 3% said they ‘couldn’t afford it’,and 4% said they ‘didn’t know enough aboutthem’.
    • 15% of people in this category said that they WERE likely toconsider taking out a stakeholder pension, of which 65% wouldconsider themselves ‘likely’ to do so in the next 12months.
    • 3% of people said they had already taken out a stakeholderpension.
  • Norwich Union subscribes to the study conducted by MORIFinancial Services (MFS). The survey is continuous with 2,000interviews a month, conducted face to face in the home.
  • The data in this release was collected between September andDecember 2001.
  • Norwich Union is the UK’s largest insurer. It is theUK’s largest provider of life, pensions and investmentproducts and one of the leading IFA providers. IFAs provide around75% of the company’s long-term savings business.
  • Norwich Union has strategic alliances with over 20 buildingsocieties and other leading UK brand names including TescoPersonal Finance Limited and The Royal Bank of ScotlandGroup.
  • Norwich Union’s news releases are available on thisinternet site
  • A selection of images is available from the CGNU Newscast siteat www.newscast.co.uk
  • An ISDN facility is available for studio quality interviews.Call the press office on 08703 66 68 73

For all life & pensions media enquiries 08703 66 68 73
For all other media enquiries 08703 66 68 68

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