Millions aren't checking their pensions
New research says over-45s aren't looking at their pensions.
Millions of workers are failing to check on their pension pots, according to new research. The majority of over-45s who have yet to retire admit that they pay little or no attention to their pensions.
Of those surveyed by Aviva UK Life, 41% of over-45s said they never spend any time planning or reviewing their pensions.
Unsurprisingly, the closer we get to retirement the more likely we are to take a closer look at how our pension savings are doing. But a quarter of those who are within two years of retirement still admit to not paying any attention to their pension pots.
“An alarming proportion of the UK’s pension pots are being left unmonitored, with many simply ignoring their pension statements and hoping for the best,” says Clive Bolton, managing director of retirement solutions at Aviva UK Life.
Fingers in none of the pies
While the majority of us only have one pension pot, many people have joined two or three schemes over their working lifetimes. Yet, they aren’t monitoring how these different pots are growing.
Of those people with more than one pension just 27% are keeping an eye on how they are doing, while over a third are ignoring their secondary pension schemes completely. Meanwhile nearly a quarter of those with more than one pension are ignoring all of them!
Some of the people surveyed weren’t even sure how many pensions they have. A surprising 6% had no idea of the number of pension schemes they were signed up to.
Pension confusion
The main reason people aren’t keeping an eye on their pension pots is because they don’t know how to manage them.
Half of over-45s do nothing with the routine information they are sent about their pension, with 12% admitting they don’t even read it. Only 37% use the information to check their pensions are on track and do something if they aren’t.
One in 10 admitted the reason they don’t do anything is because they don’t know what they should be doing. The same proportion said they did nothing as they believed their pensions were too small to bother with.
Another 8% don’t think they need to bother doing anything with their pension savings until they are nearing retirement – unfortunately it is likely to be too late to improve your pension pot at that stage.
“At the very least people need to understand what their total savings are across all of their pension pots, so they can plan in an informed way for their retirement,” says Bolton.
Simplify with consolidation
One solution to the problem could be to consolidate your pension pots if you have more than one. That way you’ll reduce the amount of paperwork you need to look at and also have a clearer idea of how much you’ve got saved for your retirement.
Only 14% of over-45s have brought all their pension savings together in one scheme. Of those people 21% did so following advice from a financial adviser.
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