On the go: Forty per cent of employed 46 to 55-year-olds do not know how much they have saved for retirement, a recent survey has found.
A poll from Aviva of 2,010 employed adults aged 22-65 – the age criteria currently used for auto-enrolment pension schemes – reveals 31 per cent admit to not knowing how much they have saved in their pensions. Surprisingly, this peaks at 40 per cent for 46 to 55s, compared with just 24 per cent of employees aged 22 to 30.
Commenting on these findings, Nathan Long, senior analyst at Hargreaves Lansdown, said: “What with lost pensions, indecipherable statements and disjointed online access, it’s no surprise people don’t know how much they’ve saved for the future. Putting a greater emphasis on workplace pension providers to report how members have engaged with their pension would intensify focus on driving up the levels of member understanding from a much earlier age and help offset some of these issues.”
Malcolm McLean, senior consultant at Barnett Waddingham, emphasised the need to encourage greater involvement by individuals in progressing their pension plans.
“Awareness is the key and the introduction of the new simply worded pension statement will help as will, if it ever arrives, a pensions dashboard showing all the person’s pension holdings, including the state pension,” he said.
Alistair McQueen, head of savings and retirement at Aviva, noted that “not knowing how much you have saved in your pension pots is like approaching retirement with a blindfold on”.
Two in five businesses say their staff are not engaged with their pension, despite paying paid £52bn into their defined contribution workplace pensions in 2016 and more since, according to Engaging with Savings, a CBI/Aegon Guide to Pension Engagement’
Yet figures released earlier this year by the Department for Work and Pensions reveal workplace pension participation is at an all-time high, reaching 84 per cent of eligible employees in 2017, up from 77 per cent a year earlier.
However, the average amount being saved by each active saver is at a record low of £5,110 a year (2017), and this figure may be inflated by higher earners saving a greater proportion of their salary.
Aviva’s research also shows that almost half of working adults aged 22 to 65 believe they need to be saving more.
There is also a clear difference between men and women, with 23 per cent of women saying they feel worried about their level of savings compared with 13 per cent of men. Similarly, while 18 per cent of men describe themselves as confident about their savings, just 10 per cent of women say the same.
