The latest findings illustrate the scale of the problem in the UK a decade on from the introduction of Pension Freedoms in 2015 – with many disengaged from their workplace pension and feeling unequipped to manage their retirement savings in general.
The research shows:
• Whilst 43% do not know how much they are contributing to their workplace pension, an even higher number (54%) don’t know how much their employer contributes.
• More than a third of workers (36%) admit they don’t feel confident in their ability to manage their retirement savings.
Concerningly, despite these findings, formal financial advice remains an under-utilised tool. Just one in five workers have (20%) sought help from a financial adviser for guidance on managing their finances, and fewer than one in ten (8%) have approached their employer for support.
The research echoes the latest findings from the Pensions Policy Institute, which revealed that 70% of defined contribution savers fully withdraw their savings without any sort of financial advice.
Pete Glancy, Head of Pensions Policy at Scottish Widows commented: “With so many workers in the dark on their workplace pensions, it’s little surprise that confidence is low. There is a clear need for better support for workers, from the start of their savings journey, engagement during their working career right through to the point at which they access their retirement pot.
“Since the introduction of Pension Freedoms in 2015, more people have taken advantage of the option to withdraw their pension as cash. Whilst this flexibility can be beneficial, rushing into withdrawals risks depleting retirement savings too soon, if not done cautiously.
“For those who have the means, seeking financial advice is invaluable – offering structure, reassurance, and a plan tailored to peoples’ needs. At the same time, the onus is also squarely with providers who must do more to engage savers early, and make pension information more accessible, ensuring future generations are better equipped to make informed decisions.”
Scottish Widows’ Retirement Report
|
