According to the latest consumer research by Baring Asset Management ("Barings") 1, the international investment firm, more than two in five adults (41%) - 8 million people - cannot remember how their retirement funds were invested when they last reviewed their pension plans. The findings highlight a lack of active, regular pensions planning by the majority of GB adults. The research indicates that in spite of the on-going global financial crisis people are refusing to consider the impact it may be having on their long-term savings.
The number of GB adults who have never reviewed their pension plans is also alarmingly high: 45%, or 16 million non-retired Brits, admitted to never having reviewed their pension plans. A further 12% of respondents did not know when they last reviewed their pension. Of those non-retired adults who recall having reviewed their pension plans, less than half (48%) had done so in the last twelve months. A comparison with the results of the same survey conducted in July 20082, before the start of the financial crisis, highlights that this apathy towards pensions planning has not improved.
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When was the last time you reviewed your pension plan? |
|
|
|
2008 |
2012 |
|
Less than 12 months ago |
22% |
20% |
|
1 - 2 years ago |
12% |
11% |
|
3 - 4 years ago |
6% |
4% |
|
5 - 6 years ago |
4% |
2% |
|
7 - 8 years ago |
1% |
1% |
|
9 - 10 years ago |
1% |
1% |
|
More than 10 years ago |
1% |
3% |
|
Never |
39% |
45% |
|
Don't Know |
15% |
12% |
While the vast majority of GB adults continue to show a reticence towards actively reviewing their pension plans, the research has identified a slight increase in the number of non-retired GB adults with a pension who chose the fund allocations themselves. In last year's survey3, 20% of those who had reviewed their pensions had personally selected the funds: this figure is up to 23% this year, the highest percentage recorded since this question was first asked as part of the annual consumer research in 2008, when 19% chose the fund allocations themselves. The research found that over a third (35%) had selected the default investment option for their retirement funds, down from 40% four years ago.
Marino Valensise, Chief Investment Officer at Barings, comments: "This research shows that a worrying proportion of people are not making the necessary plans to ensure their pension provides as they need it to in retirement.
"It is concerning to think that despite the very high profile global financial crisis that we are experiencing not more people have considered and acted upon the need to address how it may be affecting their funding in retirement. A large proportion is happy to accept the default setting which may not necessarily offer the best fit in terms of risk and reward. People who fail to take an interest in understanding the type of pension they have or indeed where it is invested are burying their heads in the sand."
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