According to a new study*, of more than 2,000 working adults with an explained employer contribution pension, nearly a portion (49%) said they don’t know where their pension is invested. It turns out that there is a general lack of understanding of pensions. , with 29% unaware that their pension is invested. Even their retirement is invested, and 38% say they don’t know that their retirement had a selection of investment funds, a figure that rises to 44% for those over 55.
Jonathan Watts-Lay, Director of WEALTH at Work, comments;
“It is worrying that our studies show that many other people do not realise that a pension is an investment, or even that they have the option to choose how their money is invested in their pension. What’s concerning is that the situation is getting worse for those nearing retirement (age 55 and older), because at this point, other people want to think about how they plan to generate a source of retirement income (i. e. , take it in cash, buy an annuity, make a withdrawal, or a combination of options) and make sure their retirement investments or their “path down” are aligned with that.
And he adds: “So that people can better prepare for their financial future, it is essential that they pay their pension as soon as possible. Many leading companies offer their employees financial education and advice through financial advisors to help them broaden awareness and commitment to their pensions and retirement options. Our experience shows that interactive financial education workshops are much more engaging than passive information on a page or online brochure. Early in a worker’s career, financial education covers how retirement plans work, employer and employee contribution levels, tax breaks, the budget they can choose, and how they can modify the budget in the future. that your pension is invested. Mid-career, workers will also want to understand whether their pensions and other retirement savings are in line with their goals, as well as how sources of income can be generated in retirement and ensure that certain investments are controlled accordingly. with this, for example. example. your investment career. Then, once retired, financial education or individual advice support workers understand how to generate income from their pensions and other savings, as well as how to seek additional support, adding regulated financial advice.
*Research on WEALTH in tables conducted online through Opinion Matters from 20/03/24 to 26/03/24 among a panel of 2,002 employees over the age of 18 who receive an occupational pension with explained contributions.
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