A total of 66 per cent of defined contribution (DC) savers would be likely to sign up to a pension scheme, whereby the employer sets a target retirement income and manages it for them according to latest research by Hymans Robertson.

Research from over 500 UK adults currently paying into a DC pension found that just 24 per cent would choose to opt out of such a scheme managed by the employer with 52 per cent stating that opting out would be unlikely.

Seventy-three per cent of savers admitted that they would prefer estimates to be on the expected retirement income rather than the size of the pension pot.

Hymans Robertson head of DC consulting Lee Hollingworth said: “The working assumption for current DC provision is that through providing education – such as the benefits of saving for retirement and the available investment options – members will be enabled to manage their own pension well.

“But examples of genuinely effective education initiatives are few and far between and the fact that 53 per cent of savers don’t know what their pension scheme is invested in is evidence that people are not sufficiently engaged to manage their DC pensions adequately. Further evidence of a lack of engagement or knowledge is the fact that 83 per cent of scheme members select the default investment option and that over a third don’t shop around for the best deal when purchasing an annuity at retirement.”

Hollingworth concluded: “Individuals care about what income they will get in retirement. They don’t care about how they will get there. The mechanics of a DC pension scheme will be of little interest to the majority. If anything it can be a turn-off. They just want to know that they will have enough to live off when they retire and if not, what action they should take.”

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