Research by the National Employment Savings Trust (NEST) has revealed that one in three employees is put off saving for retirement due to the confusing jargon that exists.
Nearly 2,000 adults participated in the poll, which highlighted that just 6% of respondents found pensions easy to understand whereas over half admitted that they found pension advice complicated and were not sure which option was best for them.
With millions of employees in big firms due to start saving for retirement via the workplace auto-enrolment scheme, the research emphasises the need for small businesses to raise awareness of pension options among staff.
The new auto-enrolment scheme was announced by the Department for Work and Pensions (DWP), who stated that firms with fewer than 50 workers will have until May 2015 before they have to enrol staff onto the pension schemes, however larger businesses will be required to start auto-enrolment in October 2012.
According to the Institute of Directors (IoD) small firms are still unsure of their obligations on workplace pension schemes, with many unaware that they will be required to set up and fund these schemes. The IoD revealed that one in five of their members did not even know the legislation was coming into effect.
NEST chief executive, Tim Jones stated that getting the language right is a challenge all pension providers will need to tackle. While the Forum of Private Business (FPB) commented that details of workplace pension schemes had been hugely under-publicised, with few employers aware of the auto-enrolment timeline.
A DWP spokeswoman has commented that a pension regulator would be in touch with all small businesses a year before auto-enrolment is due to start to help prepare employers for the new schemes.
