Half of savers lacking interest and engagement with their DB pension

The PPF surveyed 2,000 DB scheme members and found that just a third were concerned about not having enough to live on in retirement.

The research highlighted a worrying lack of knowledge about several important aspects of these schemes, with almost a quarter (24 per cent) of people believing their DB pension will match their annual salary.

The PPF argued that poor levels of financial education could hamper people’s ability to plan for retirement, with the survey also showing that 30 per cent of respondents believed they had to be working for their employer at the time of retirement in order to receive their DB pension.

Twenty-nine per cent of savers were unsure whether they could access their pension before they retired, rising to 40 per cent among women.

Additionally, more than a third of respondents were unsure whether they could transfer out of their DB scheme, while a “staggering” 75 per cent did not know that their pension was protected by the PPF, an especially worrying figure given that the survey also found 60 per cent of 35 to 54-year-olds had considered transferring out of their scheme due to concerns of a high-profile insolvency.

Sara Protheroe, chief customer officer at the PPF, said: “It’s extremely worrying that so many people with DB pensions are unaware of the valuable protection available to them if their employer failed, and this may result in inappropriate DB transfers.

“It’s also concerning that one in three people are concerned about not having enough to live on in retirement, yet fewer than half know how to find out how much their DB pension scheme is worth, particularly when our research also revealed misunderstandings around how much a DB pension typically pays.

“We already know that the nature of retirement is changing, with people working and living longer, so it’s really important that individuals make 2022 their year to get retirement ready and take the time to understand how their pensions can help them achieve their retirement goals,” she added.

The survey also revealed a general lack of engagement with DB pensions, with 58 per cent of respondents unconcerned about keeping in touch with their scheme administrator, rising to 76 per cent among over-55s.

Almost half (48 per cent) of DB members had never met with a financial adviser to discuss retirement savings, while just 40 per cent had discussed their pension pots and savings as a whole with an adviser.

Protheroe continued: “Getting retirement ready is essential, and the earlier you do this in your working career the better. This is why we want people to make 2022 the year they engage with their pensions, regardless of age.

“Our findings suggest that many people could be heading into retirement without enough income to support their plans or could even be missing out on retirement income they’re owed due to lack of understanding and engagement.”