A third of DC pension members 'have no idea' how much they have saved

A third of savers contributing to a defined contribution scheme have no idea how much is in their pension pot, according to analysis of FCA data by consultancy Broadstone.

The data from the Financial Conduct Authority's latest financial lives survey showed that over a third of savers contributing to at least one DC pension were unaware of how much is being paid into their pot, personally and by their employer.

Broadstone, an independent pensions consultant, said that while inertia had been a driving force in creating millions of new pension savers, it could be acting as a drag on increasing the contributions necessary for savers to achieve an adequate standard of living in retirement.

This is highlighted by the fact that three-quarters of savers with at least one DC pension have not increased the percentage of salary that they are contributing to their pot.

Pension inertia versus inaction

When respondents were asked if the felt confident that their pension or pensions would give them the income they hoped for in retirement, four in 10 disagreed, a third agreed and a quarter neither agreed nor disagreed

Damon Hopkins, head of DC workplace savings at Broadstone, said: “It is abundantly clear that the next phase of auto-enrolment needs to see a transition from inertia to action – from the Government and employers. Having relied on inertia to get millions more people paying into workplace pension schemes, we need to rely on the same inertia to increase contribution rates if savers are to achieve the standard of living they desire in retirement.

“Despite lacking confidence about achieving their desired income in retirement, the FCA data shows that savers are still unaware how much they are contributing and how much income that will generate, let alone whether they’ll have enough in retirement.”