Far more Britons believe owning property is a better way of providing wealth than participating in a pension, according to a survey by the UK’s Office for National Statistics.
The ONS’ Wealth and Assets Survey, the most recent installment of which was conducted from July 2016 to December 2016, is intended to address gaps identified in data about the economic well-being of households in the UK. It collected information on level of assets, savings and debt; saving for retirement; how wealth is distributed among households or individuals; and factors that affect financial planning.
According to the survey, when considering which method of saving will make the most of an individual’s money, real estate was the most popular option, named by 49% of those surveyed. In comparison, employer pension plans were a distant second, as only 20% of those surveyed believed those will make the most of their money.
The survey also asked respondents under 60 who were not in receipt of a pension, and not currently contributing to a pension, their reasons for not contributing to a pension. Being unemployed, having a low income, or still being in school, was the most common reason for not contributing to a pension, which was named by 55% of the respondents.
While the ONS says this has been the most frequently chosen reason since July 2010, the percentage of people choosing this option has been increasing over the past seven years.
In light of major pension reforms in recent years, the survey also asked questions to assess the respondents’ level of understanding of pensions. The ONS said it wanted to gauge the extent to which external factors influence decisions on pensions, savings, or investments.
The ONS found that 42% of adults aged under 40, or those aged 40 and over and not retired, said they knew enough about pensions to make decisions about saving for retirement. This was a decrease from the 46% reported in the previous survey, which was conducted from July 2014 to June 2016.
The percentage of people who answered that they don’t know enough about pensions rose in the most recent survey to 15%, from 11%.
When asked which was the safest way to save for retirement, 38% of survey respondents chose employer pension plans, which was down from 40% in the previous survey. More than half (54%) of those questioned said they were confident that their retirement income would give them the standard of living they hope for, which is up from 51% in the previous survey.
Respondents are questioned every two years, with each period forming a “wave.” Wave 1 covered the period July 2006 to June 2008, with subsequent waves carrying on continuously from this date. Wave 6 of the survey will cover from July 2016 to June 2018.