UK – Extensive media coverage and government promotion of stakeholder pensions is paying off according to a report commissioned by the Association of British Insurers (ABI). 14% of those questioned said they will take one out in the coming year, while more than a third not intending to said they would change their minds if employers arranged the scheme.

The report finds that very few people heard about the new pension system from potential stakeholder providers and financial organisations such as insurance companies, banks and independent financial advisers.

Says Mary Francis, director general of the ABI : “Employers are an important source of advice and help on financial matters. We hope that they will take on their role with enthusiasm in October.”

The report also suggests most people taking out a stakeholder scheme are doing so because they lack any pension provision at all, whilst one in five said it was to top up their current scheme. Overall contributions will be small, with only £500m (€814m) potentially being invested in stakeholders by next April. Most respondents say they will contribute between £21-£30 per month.

Those on lower incomes are more likely to take out a stakeholder plan, say the report, since those that earn more feel their existing cover is adequate.

The survey finds that an overwhelming majority of those that intend to take out a stakeholder will seek further advice, although not necessarily form formal sources, such as financial organisations, as over half say they will talk to colleagues and consult the internet.

The report says it is still too early to tell whether stakeholder pensions will be successful at increasing private pension provision, particularly among moderate earners. It does, nonetheless, point to positive signs, especially given the level of awareness that has been achieved since the initiative was launched. The high awareness levels suggest that the stakeholder pension market could grow quickly in its first year.

The ABI represents around 400 insurance companies in the UK, accounting between them for some 97% of the UK’s insurance business.