Over a quarter (28%) of employees in a defined contribution workplace pension scheme say they have “no idea” how much their pension is worth, according to research by Capita Employee Benefits.
A quarter could only make a rough guess as to how much was in their pot and over half (54%) do not know how much they need to save for retirement.
The research suggests that many employees are not actively involved with their pension. Over a fifth (23%) of respondents said they never check how their savings are doing.
The survey reveals that poor communication was the main reason for many not understanding their schemes:
- 34% of respondents said they did not know where their pension contributions were invested
- Of these, 46% said they had been told but the information was too complicated to understand
- Over half (55%) said that pensions jargon makes retirement planning harder
- 48% said they would be more likely to save into a pension if they understood how it worked.
Louise Harris, head of client communications for Capita Employee Benefits, said:
“Looking at these findings, it’s not surprising that more than one in three people (38%) saving into a DC pension are worried about retirement. They don’t know how much they currently have in their pot, they don’t know how much they’re going to need in their pot and the way pensions are being communicated to them is preventing them from engaging properly.
“If we’re to create a nation of savers, it’s absolutely crucial people are engaged in pensions, understanding how much they have and need, so they can adapt their contributions and choose where they invest, while regularly checking to see they are on track. Employers must therefore provide clear, good quality information, in order to empower people to make these kinds of choices.”
