A recently released survey by Old Mutual reveals that South Africans have shockingly low levels of awareness when it comes to pension funds and retirement planning.
"Low levels of engagement and awareness by members on pension fund issues continues to be an area of concern," Craig Aitchison, managing director of Old Mutual Actuaries and Consultants, said in a statement.
"For example, 50 percent of members surveyed did not know or were unsure whether their fund offered member level investment choices," he said.
The Old Mutual Retirement Monitor examines pre-retirement perceptions amongst working South Africans and measures the confidence levels of full time employed metropolitan dwellers about the financial provisions they have made for retirement.
The Retirement Monitor found that employees who were members who were part of some sort of retirement fund had a confidence level of 6.3 out of 10, which is much higher than the 4.8 which was recorded for those who do not belong to a fund.
"The gap in the confidence levels between members and non-members is hardly surprising but it illustrates the significant effect that contributing to a retirement fund could have on the ability to be financially prepared for retirement," Aitchison added.
Income levels also played a role - those who earn a substantial income were far more confident that those in a lower income bracket.
The Retirement Monitor also focused on contribution levels to retirement funds and the perceived adequacy of these.
"Worryingly, we found that 67 percent of members contributed less than 10 percent of their salary to their retirement fund each month."
"This is particularly concerning, because it is estimated that employees need to contribute a minimum of 15 percent (including the employer contribution) over a period of 40 years if they want to have any chance of ensuring sufficient savings at retirement," Aitchison added
Planning for your retirement is vital and it's never too late or too early to start doing so, for more information on the Old Mutual survey visit this website.