Perceptions of the pensions industry: Cracking the trust code
When we asked people to rate how much they trust the pensions industry – on a scale from 0 (no trust at all) to 10 (highly trustworthy) – responses were strikingly varied. People shared an array of reasons for their scores, revealing a complex landscape of perceptions around an industry designed to safeguard their retirement.
Perceptions of the pensions industry: Cracking the trust code
With financial security feeling increasingly uncertain, pensions are now more essential than ever in helping people secure their futures.
But when we asked people to rate how much they trust the pensions industry – on a scale from 0 (no trust at all) to 10 (highly trustworthy) – responses were strikingly varied. People shared an array of reasons for their scores, revealing a complex landscape of perceptions around an industry designed to safeguard their retirement.
Some respondents focused on their personal experiences, drawing either from positive interactions or years of frustration. Others pointed to external factors, like government policies or the economy, that shape their view. Many highlighted financial concerns, such as high fees and a sense that pension companies prioritise profits over people. Meanwhile, some didn’t have any particular reason for their scores, attributing it to uncertainty or general unfamiliarity with the industry.
In this article, we’re taking a closer look at the comments and concerns that people shared, examining what drives these varied trust scores and what they might mean for the pensions industry going forward.
After analysing the responses, we found they generally fall into five broad categories:
- General trust views
- Personal situations
- Financial complaints
- External factors
- No reason.
General trust views – 563 people (27%)
The general trust views section includes a mix of perceptions about the industry’s overall trustworthiness, reliability, and regulation. Unlike in previous years, positive perceptions have edged ahead, with 55% expressing trust versus 45% expressing doubt. However, whilst many people appreciate the industry’s regulatory framework, a common complaint was the lack of transparency and clarity in how pensions operate.
Views included:
“The complexity means understanding what is happening is difficult and constant governmental changes make matters worse.”
“It is heavily regulated so I don’t think they get away with dodgy behaviour, but they are still run by humans who are fallible and can’t predict the future with 100% accuracy.”
“They are a bunch of crooks. The pension providers just take my money for themselves. The pension they promised would grow actually falls in value every month, yet still they take their fees. I would have been better off just putting my pension fund into the building society.”
“I think they use a lot of unnecessary confusing language for regular people. Make it overly complex and a variety of options when its actually quite simple.”
Personal situation – 646 people (31%)
This category reflects individual experiences and views on personal savings and retirement plans. Many respondents expressed feeling uninformed about pensions and uncertain about how much they’ll need for retirement. The equal split between good and bad personal experiences highlights the inconsistencies in service quality across the industry, which suggests an opportunity to enhance member education and improve customer experience.
Some example and typical views include:
“The older generation of my family have all had good experiences with pensions both workplace and personal so I am confident that contributing to one now will stand me in good stead for the future.”
“My experience of the pensions industry has been mostly positive except for an incident where a pension provider tried to suggest that their private pension was better than my employer’s final salary scheme.”
“I have had positive experience with my pension, but friends & family have not (contributions not fully explained and end payments less than promised).”
“Transferred a pension and they took far longer than acceptable, made a mistake in the amount and two years later I am still fighting to get the ‘difference’ paid and the compensation.”
Financial complaints – 169 people (8%)
The Financial Complaints category includes respondents with a generally negative view of the financial sector, often perceiving it as overly focused on profits. Concerns about high fees and ethical issues relating to investments also suggest a desire for greater fairness and transparency in the industry’s practices. These responses highlight an opportunity for clearer fee communication and more accessible, socially responsible investment options.
Example views include:
“The government increasingly defrauds the public by charging higher and higher taxes for a social security safety net they’ve whittled away to nothing, and private pensions – which we shouldn’t have to rely on while paying tax for state funded ones – seem like an absolute scam too.”
“The institutions involved are more invested in corporate and personal gain than providing pensioners with sufficient income. The industry is based on global confidence in various markets which given the current global situation is very fragile.”
“It’s designed to make money for rich and powerful people. Skim the money off hard-working people who may never see a return on the money they have invested.”
“I know pensions are risky, as they are an investment. I also don’t know enough about where my pension is invested and have to trust that it is invested carefully and ethically but that it’s largely out of my control.”
External factors – 327 people (16%)
External Factors considers the impact of wider economic and political circumstances on members’ trust. Financial market uncertainty, government policies, and media coverage all play a role in shaping trust levels. While these factors might be beyond the direct control of the industry, they underline the importance of resilience, adaptability, and clear communication during turbulent periods.
Some example views include:
“You hear a lot about company pensions being raided, also the general state of the financial sector and the government seems scared to regulate it in any meaningful way.”
“I have heard many news stories about people losing their pensions but have not seen reliable evidence or first hand experience of this, so I trust the pension industry to a small extent.”
“Pensions are supposedly a safe investment but there are often stories in the news of pension funds being mismanaged. My trust has reduced over the past decade as incompetence seems to have risen generally over that period.”
No reason or unknown – 352 people (17%)
This group includes those who either didn’t give a reason for their rating or weren’t sure why they chose it. This often points to a lack of knowledge or personal connection with their pension scheme and savings. It highlights the importance of improving member education and communication to help these individuals better understand and engage with their pensions.
Trust varies significantly
In summary, trust in the pensions industry varies significantly, influenced by personal experiences, perceptions of high fees, and external factors such as the economy. While many recognise that the industry is well-regulated, frustrations around the lack of clear and straightforward information often hinder confidence in pension decisions.
Individual experiences also vary, suggesting an opportunity for the industry to improve service consistency and boost member education. Financially, concerns about fees and profit-driven motives indicate people would welcome greater transparency about where their money goes.
By prioritising clarity, simplicity, and improved communication, the pensions industry has a valuable opportunity to build stronger, more lasting trust with its members.
This article was first featured in Professional Pensions on 19 November 2024.
