Workplace pension savers cross a boredom threshold and become more engaged with their pot once it breaches £5,000, according to research by Hargreaves Lansdown.
Its The rules of engagement report, published in September 2018, reveals that 50% of Hargreaves Lansdown workplace pension members with less than £5,000 saved are engaging with their plan. However, 76% of those with £5,000 to £10,000 are engaged.
Engagement was assessed using seven measures: electing to pay more than the minimum set by the employer; changing where the pension is invested; choosing to transfer old pension schemes into the workplace plan; opting to save and invest alongside the pension; registering to view the pension online; logging in in the past 12 months; and nominating who should receive the pot if the saver dies.
There is little difference in the overall engagement of men (76%) and women (70%), according to the report. However, women are less likely to choose their own investments (16% compared with 26%) or take out an additional investment account (7% compared with 16%). Men are also more likely to log in to their account (81% compared with 69%).
An engagement gap exists between older and younger workers, with 59% of under-30s taking positive action with their pension, compared with 81% in the 50-plus range.
Nathan Long, senior analyst at Hargreaves Lansdown, said: “We know relying on auto-enrolment alone, with contributions of 8%, is not enough. The review of auto-enrolment came and went without pushing contributions higher. Expecting any change on this in the short term looks hopeless given the Brexit backdrop and the sensitivities the current government may have to increasing employers’ costs.
“Bridging the shortfall instead relies on people being nudged, cajoled and enticed into taking a greater interest in their own retirement planning. This doesn’t mean everyone needs a PHD in pensions. They just need to start off small by registering to view their account online and checking how much they are paying in.”