80% of young people aged between 18 and 24 feel that they were not given enough of an education on pensions and finance, according to a survey conducted by Portafina.
The pensions specialist firm also found that over half of young people asked felt they did not take their own pensions seriously because of this lack of education, and a large majority said that better financial education would have improved their finances in the present day.
This news has come after a study revealed that 83% of British people do not understand what a pension is, with only a third of people also knowing how much they are paying into their pension pot.
A pension is a fund that a person will pay into over the course of their working life, with payments being withdrawn periodically when they retire in order to help support them.
The majority of workplaces across the country are now in the process of switching to auto-enrolment which means that their employees will automatically be placed on the company pension scheme.
Employers also have to make a contribution to the employee pension pots.
As of February 2018, all workers eligible for workplace pension schemes should have been enrolled in one.
An employee can choose to opt out of their workplace pension scheme, though their employer will be required to re-enrol them at a later date, usually three years after they first chose to leave the scheme, or three years after contributions were stopped.
With a widespread lack of understanding about pensions, pension schemes and accessing personal finances, there are now questions as to whether or not most of the British public will notice as auto-enrolment pensions start to rise.
Experts also wonder if people will know how much money they have paid into their own pensions, or if they will know how to access the money when they need to.
Jamie Smith-Thompson, managing director at Portafina, said: “Part of the pension knowledge problem does point towards a lack of education from a young age.”
“Although I do appreciate some of the barriers teachers and schools experience with providing lessons on this subject matter, it is something the government needs to address.”
When asked what they wished they had learned at school, 84% of young people said that they would have liked to know more about interest rates, mortgages, banking and National Insurance, 56% wanted to know more about managing money and 32% said they wanted to know more about pensions and how having one would benefit them.
The lack of education on pensions has even extended to knowledge of state pensions, as many do not know what they are or how the money can be accessed.
Sir Steve Webb, director of policy at Royal London and the former pensions minister, has said that more still needs to be done in order to raise awareness of the state pension option.
A state pension is part of pension arrangements overseen by the government, with regular payments being made to those who are of state pension age.
Women are currently eligible for state pension at the age of 65, while men are eligible from the age of 67, though both these ages are predicted to rise over the next few years.
Generally, a person will have to have 10 qualifying years on their National Insurance record to be eligible for a state pension, though the years do not have to be consecutive.
An employee is not required to stop working once they reach state pension age, but they will no longer pay National Insurance.
Mr Smith Thompson said that saving for the future can only be a good thing, so the earlier a person gets into the habit of learning about their finances, the better.
As it has been suggested that finance should be taught from a young age, a survey was also taken from 1,500 parents to see how many agreed that their child should be educated about money.
91% of parents agreed that they wanted their children to know about money management and saving, 65% wanted them to learn how to pay bills and manage debt and missed payments, 62% would like them to know about banking and general investment and 41% wanted their children to learn about pensions and how having one can help them in the future.
Just 3% of parents surveyed thought that their children did not need to learn about financial skills while they were at school.
Upon being asked why they do not take their pensions seriously while they are still young and can do something to help it, 46% of people surveyed felt that it was too far away to make a priority, 41% said there had been a lack of education on it at their school, 32% said they found the notion confusing, 22% did not know who they should ask about pensions and 15% found it too scary to even think about.
These statistics are taken from a February 2019 survey of 2,002 employed UK adults.
All information found in this article was received from https://www.marketwatch.com/press-release/portafina-educates-brits-on-pensions-after-83-reveal-they-dont-know-what-a-pension-is-2019-08-10
