The latest survey of small firms and their attitudes to pensions highlights the challenges facing the industry if it is to raise awareness of the need for pension provision and build trust in the industry.

The survey, which was commissioned by Lifetime, found that the extensive debate about reform within the pensions industry has simply washed over the average consumer. It found that there was no awareness among small firms of the National Pensions Policy Initiative, its recommendations and their implications.

One of the main recommendations of the report, mandatory access by all employers to pension coverage for all employees, is seen as problematic, time consuming and an administrative headache for small businesses, the survey found.

Small businesses reject the idea of setting up pension schemes for their employees due to reasons such as high turnover of staff. Among the other reasons discouraging them from establishing schemes were that employees were too young and not interested, that staff were too mobile or that employees already had too many deductions from their salaries.

Some small employers were reluctant to present the option to staff, as there was a concern that the employee might then expect a contribution from the company.

However, despite their reluctance to provide pension schemes for employees, most self-employed people running their own businesses were conscious of the need to provide for their own future. But a majority of the self-employed favoured the idea of buying property instead of paying into a pension fund.

Negative attitudes toward pensions had been created by issues such as high commission levels, churning and instances of non-payment of pensions to individuals as well as poor fund performance.

All of which suggests the industry has a lot of work to do to build consumer confidence.