Clare Stinton, head of workplace saving analysis, Hargreaves Lansdown: “More than half of people (53%) don’t know how their pension investments are performing - and the picture becomes even starker when viewed through a gender lens. Just 36% of women are in the know, compared to 58% of men. This gap in awareness is present across the age spectrum, and it matters, because investment performance is one of the biggest drivers of pension growth.
The gender pension gap doesn’t happen overnight, it builds over a lifetime, due to career breaks, the gender pay gap, and more women working part-time. Understanding your pension and taking early action can narrow the gap. Supercharging contributions in your 20s and 30s, paired with checking in on how your investments are doing while you have decades ahead, can deliver powerful long-term results. This is thanks to compounding - earning returns on your past returns - which steadily does the heavy lifting for you over time. If you’re comfortable with the level of risk, staying invested for longer gives you more time to ride out any dips and benefit from long-term growth. Put simply, the earlier you start, the more potential you can unlock.
Only 43% of those in the sandwich years, aged 35-54, know how their pension is performing. It’s a life stage filled with competing priorities, many will be juggling careers, children, and caring responsibilities. Yes, life is busy, but carving out time to invest in you and your future is crucial. This is the prime time to take back control and make sure that when the time comes, you’re the one choosing when to retire, how to spend your time, and what kind of lifestyle you want to enjoy. Wait too long, and your options may start to narrow.
It’s encouraging that 50% of those aged 18-34 understand how their pension is doing, just a whisker behind the 51% of those aged over 55. For those in the dark, the main barriers are not knowing where to look, or how to check investment performance, with 18% unaware they even need to. This underlines the critical role of financial education. With so many unsure of where to begin, it’s clear we must do more to empower people to take control of their financial future.
HL Workplace sees first-hand how the right support and information can drive action. When people get access to holistic financial education alongside their auto-enrolment pension, they’re far more likely to engage. Around 25% of men and 15% of women are actively choosing investments outside the default fund – but this jumps to 45% and 29% respectively, when they’ve taken up the opportunity to sit down one-on-one with an expert.
People now have more control than ever over their retirement. But they need the right tools, support and confidence to make informed decisions. The FCA’s Value for Money framework is a vital step in the right direction, helping protect those sleepwalking toward retirement from underperforming schemes. The push to equip providers to offer more personalised support through the advice guidance boundary review is equally important. We need to help people join the dots between today’s decisions and tomorrow’s financial freedom.”
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