More than half (57%) of respondents are not confident their pension will deliver an adequate retirement income, according to research by consultancy Hymans Robertson.
Its research, which surveyed 500 UK adults who save into a defined contribution (DC) pension scheme, found that 23% of respondents do not know how much of their current monthly salary they will need to contribute to their pension in order to have an acceptable standard of living in retirement.
The research also found:
- 54% of respondents said the information they receive about their pension is too complicated and full of jargon they do not understand.
- 57% of respondents would act if the information they received was clearer.
- 38% of respondents never get around to making proactive decisions about their pension.
Lee Hollingworth, partner at Hymans Robertson (pictured), said: “A step change is required in the way DC is delivered for savers because in its present form it’s not fit for purpose.
“The majority of those DC savers who took part in our research have taken a conscious decision to save for retirement and if these people are not engaged with their pension, it will be a huge struggle to engage the millions of people enrolled into a DC scheme through automatic enrolment.
“Current methods based on education to facilitate a [do-it-yourself] approach are doomed to fail [because] the majority of savers are not well placed to manage their own plan and need stronger direction and supportive guidance.
“Member communications from trustees and employers need to simply focus on the desired target, progress to date, required actions to stay on track and also the consequences of taking no action.
“By following this approach, both employers and trustees can help members improve their level of pension at retirement, while also better meeting their respective strategic objectives and governance responsibilities.”