UK - A third of people eligible to be automatically enrolled in a workplace pension under the UK government's new scheme will quit the new scheme, a survey has revealed.
Public trust in pensions is now lower than ever and threatens to undermine auto-enrolment, the National Association of Pension Funds (NAPF) said on publishing the survey results.
Joanne Segars, NAPF chief executive, said: "Auto-enrolment could be a huge step forward, but we are going backwards when it comes to confidence in the product."
Faith in pensions had to be bolstered if society was to pay for its old age, she said.
The survey showed 54% of all employees were not confident in pensions compared with other ways of saving.
With 37% saying they were confident, the data resulted in a Confidence Index minus of 17%, it said.
This was the lowest level since the index began in 2007, and sharply down from minus 6% in September 2011 and plus 5% in autumn 2010, it said.
In a statement, the organisation said it was concerned that low confidence would undermine the landmark rules, which will start in October, to automatically enrol as many as 9m UK workers into a pension.
When the 33% of people who said they would quit the new pension scheme were asked why, 40% said they did not trust the pensions industry.
The NAPF blamed the weak confidence on low trust in the pensions industry, particularly around charges and annuities.
Squeezed household incomes and stock market volatility over the past year were also putting people off saving into a pension, it said.
Segars called for more clarity over charges.
"People have to be sure that it pays to save," she said. "Pension charges can be fiendishly complicated, and they must be made clearer. The annuity market has also disappointed many savers, and they need more help to get the best deal."
She added: "Ministers said they would reinvigorate pensions, but we have not seen much evidence of that. Once again, we face the threat of the goalposts on tax relief being moved, which would be a further knock to savers' confidence."
Reacting to the news, pensions law firm Sackers & Partners said the industry must get more involved with people if it is to rebuild confidence.
Partner at the firm Zoe Lynch said: "If fundamental lack of trust is to blame, the pensions industry must make strides to better understand and to engage with the public."
The news that one in three workers may opt out of pensions saving even though enrolment would be automatic was depressing for anyone, she said.
"This will leave many in poverty in retirement and taxpayers having to continue to fund pension benefits for those without their own provision," she said.
The possibility of a low take-up under the auto-enrolment scheme could drive up charges - already a potentially damaging subject for the industry, Lynch said.
"If they get worse, this could reduce take up even further," she warned.
The finding that 33% planned to reject the pensions they were channelled into was particularly relevant to the National Employment Savings Trust (NEST), Barnett Waddingham remarked.
Rob Thomas, associate at the consultancy, said: "The level of opt-outs is likely to be of particular interest to NEST, for which currently non-pensioned, low paid and risk-averse workers are a key target market."
The NAPF survey data suggested that the people most likely to opt out were those in the intended target market under pensions reform - low to moderate earners without pension provision, he said.
"If the NAPF survey becomes reality, 'soft compulsion' could be seen to have not met all of its objectives and full compulsion could be sooner than we think," he said.