One in three over 40s with no pension plans

More than a third of the over 40s have no retirement plans in place.

Research by Norwich Union reveals a 'pension paralysis' among the over 40s – with 41 per cent citing a lack of understanding of complex products and 29 per cent claiming products are too complex to understand as reason for not having pensions in place.

Furthermore 26 per cent of those without pension plans in place admitted they were sticking their heading in the sand.

Of those with a pension, 37 per cent stated they did not know what their income would be in retirement.

Iain Oliver, head of pensions at Norwich Union, said: "This research reveals the challenge for the financial services industry not only in helping people understand why they must start pension planning, but also in simply educating them on the options available."

Research by LV= shows one area where pension take-up is growing is with Self Invested Personal Pensions (Sipps).

A poll of advisors found 27 per cent have increased the amount of the Sipp business so far in 2008 and 30 per cent who previously did not undertake any Sipp business have now begun advising and completing Sipp cases.

Ray Chinn, head of pensions at LV=, said: "It is important to stress that Sipps are not suitable for all clients.

"The interest in them is good news for pension planning in general, but advisers must ensure suitability of the product.

"In many cases, however, Sipps can provide a flexible and low-cost option to allow clients to hold pension funds."