More than a quarter (28%) of respondents saving into a workplace defined contribution (DC) pension scheme have no idea how much is in their pension pot, according to research by Capita Employee Benefits.
Its research, which will be published in full later in May, found that a quarter (25%) of respondents could only make a rough guess at how much was in their pension pot.
More than half (54%) of respondents do not know how much they should realistically be saving for retirement, while more than a third (38%) are worried about retirement.
The research also found:
- 23% of respondents have never checked how their pension is doing.
- 34% of respondents do not know where their pension contributions are invested, while 46% of these have been told, but found the information too confusing to take in.
- 55% of respondents said pensions terminology and jargon are a barrier to being able to prepare more effectively for retirement.
- 48% of respondents would be more willing to save into a pension if they understood how it worked.
Louise Harris (pictured), head of client communications at Capita Employee Benefits, said: “Looking at these findings, it’s not surprising that more than one in three people saving into a DC pension are worried about retirement.
“They don’t know how much they currently have in their pot, they don’t know how much they’re going to need in their pot, and the way pensions are being communicated to them is preventing them from engaging properly.
“With DC pension schemes the go-to for many employers as they look to auto-enrol their staff, it’s vital that pensions communications are clear so as to encourage engagement and effective planning for retirement, otherwise as contributions increase, so may opt-outs.
“Communication about pensions is an issue that has recently been thrust into the limelight following the Chancellor’s announcement regarding the ‘guidance guarantee’. But guidance at the point of retirement, while important following the changes set out in the Budget, isn’t enough.
“If we’re to create a nation of savers, it’s absolutely crucial people are engaged in pensions, understanding how much they have and need, so they can adapt their contributions and choose where they invest, while regularly checking to see they are on track.
“Employers must therefore provide clear, good-quality information in order to empower people to make these kinds of choices.”