Saver trust in pensions has “significantly increased” over the past year, although there is still substantial room for improvement to reach a more acceptable level, research from Trafalgar House has suggested.

Trafalgar House's latest Trust & Confidence Index for the pensions industry, which was based on the views of over 2,000 people, recorded a trust score of 4.95 out of 10, up by 6.9 per cent from the 2021 index.

The research also found that while a quarter (25.4 per cent) of people said they have very little or no trust in the industry, this is down from 31.5 per cent in 2021.

In addition to this, although just over a quarter (27.3 per cent) said their trust in the industry has a negative impact on their savings, one in seven (14.6 per cent) said it has positively impacted their plans.

However, only around three in 10 (28.9 per cent) said they trust pensions a reasonable amount or a lot.

The research also suggested that members have more confidence in their own decisions than they do in the role the industry plays in their retirement savings.

Indeed, almost two thirds (63.4 per cent) were confident in their choice of where their pensions are held (up from 58.5 per cent in 2021) and, for the first time, a majority are confident in their own decisions for the amount they have saved, at 53.5 per cent, compared to 46.6 per cent in 2021.

Despite this, a "worrying" 11.2 per cent of savers don't expect to ever be able to retire, while one in five (20.75 per cent) believe they will need to work longer that their normal retirement date.

Trafalgar House also noted that whilst the number of people who don’t believe they will have enough to live comfortably in retirement has again fallen slightly, from 69.8 per cent to 68.3 per cent, this still represents a "significant majority", with less than a third (31.7 per cent) stating that they have enough or more than enough retirement savings.

The research also considered the impact of recent cost-of-living increases on the plans of savers and pensioners, revealing that around four in 10 (39.4 per cent) savers believed their pension planning was directly impacted by rising living costs – with delaying plans to retire being the most common result.

In addition to this, at least one in five (21.6 per cent) savers felt they were either fairly or very likely to cut back on pension contributions due to cost-of-living increases, although the research showed they were far more likely to remove other spending such as holidays, subscriptions, socialising and non-essential shopping.

Commenting on the findings, Trafalgar House client director, Daniel Taylor, emphasised the need for improvements, warning that the "continued cautious year-on-year improvement in trust scores brings a little comfort".

He continued: “For the third year in a row, our research has shown that the pensions industry comes up short when it comes to earning the trust and confidence of members.

"For a member-focused industry, these will be disappointing results and perhaps at odds with the perception the industry has of itself in terms of meeting members’ needs.

“Having seen scores rise after the pandemic, when the industry was forced into a period of fast-paced online modernisation and service flexibility, the upward trend in results gives some indication that the new digital, adaptable and remote service model is something that members are on board with.”

“With members already struggling to make pensions work for them, the cost-of-living crisis has come at a difficult time. With the research suggesting a sizeable portion of savers and pensioners are feeling the impact, it’s now a crucial time for the industry to offer effective support.

“Through better engagement, and communication that truly resonates, the industry can help bring more confidence to members in their ability to improve their own retirement picture through making positive, impactful changes. In turn, this will help to improve member trust in the pensions industry, which remains unacceptably low.”

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