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The most important benefit an employer can provide is a good pension fund, says a new report.

According to the National Association of Pension Funds (NAPF) 75 per cent of employees described a pension as 'important' but almost half (45 per cent) had more confidence in the reliability of other forms of investment to fund their retirement.

Small business owners would receive more loyalty from their staff if they provided a pension, the study showed, with 49 per cent saying they would be more committed to their employer.

Joanne Segars, NAPF's chief executive says employees perceive pensions as a 'fundamental part of their employment package' and businesses not providing them would be better advised to do so.

Nevertheless, she comments, the lack of confidence in pensions means 'it is clearly imperative that both the Government and the industry work harder to restore a positive image'.

Indeed, in a recent SmallBusiness.co.uk poll an overwhelming 52 per cent of you said you wouldn’t trust your money to a pension scheme.

NAPF represents over 1,300 workplace pensions providers. Its members provide pensions for over ten million people with more than £800 billion in assets. It was set up to represent providers in the media, to regulators and to government.

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