The firm’s latest Trust and Confidence Index revealed the score for public trust in the pensions industry rose for the fourth consecutive year to 5.26 out of ten, from 4.95 the year prior.

Despite this, the index also found member confidence in their retirement income fell, with just 30.9% of respondents saying they were confident of having enough money to retire. Additionally, 47.8% believe they have much less than they need for retirement – an increase from 44.6% last year.

The index also showed the majority (53.7%) of respondents feel they will either need to retire late, may never retire, or they do not know when they may be able to.

Trafalgar House suggested the most important factor for building trust with the public is better communication.

Trafalgar House client director Daniel Taylor said: “There are some really interesting things to note in this section of the results. Perhaps controversially, it could be considered a good thing that confidence in having enough funds to retire has dropped.

“As an industry we have long worried that the general public haven’t been realistic enough about their retirement pot, grossly underestimating needs and failing to take into account the cost of living, longer life spans and an over reliance on state pension provision, all meaning they would be in for a big shock – this would also have a huge impact on economy not to mention social factors. It could be argued that if there is an acknowledgement there won’t be enough, more can be done to address that, and earlier.

“What’s also interesting is that confidence in their own decision making is up. Higher, in fact, than belief in the role of industry and others in meeting their needs.”

Taylor added: “Where this confidence is coming from is another question. Our last results showed that member communication was the most important factor in building trust – does this mean we are doing something right?

“The fact is, members will be responsible for more than ever before when it comes to decision making at retirement so it is crucial they are empowered to make those decisions, and not doing anything detrimental that could undo years of hard work and savings. The realism around expected retirement dates is also reassuring, albeit disappointing as a whole.”

Source: Professional Pensions