Almost three-quarters of workers admit to having little or no pensions knowledge

Nearly three-quarters (72 per cent) of workplace pension holders have little or no knowledge about pensions, research by Royal London has found.

The survey, published to coincide with Pensions Awareness Day, showed that this trend was more common amongst women, with 83 per cent stating they have little or no pension knowledge, compared to 61 per cent for men.

It revealed that only 16 per cent of savers were familiar with the term ‘responsible investment', although once they were made aware of it over half (56 per cent) stated it was important their contributions be invested in this way.

The provider also found that almost one fifth (19 per cent) of workplace pension holders had ‘no idea’ what happens to their pension contributions, with 8 per cent thinking their pension is simply saved into a bank account.

It highlighted that whilst personal pension holders were “slightly more knowledgeable”, 7 per cent still had no idea what happened to their contributions and 11 per cent believed they were saved into a bank account.

The analysis also found that just 24 per cent of those with a pension saw themselves as an investor, with women again “much less likely” to consider themselves an investor, with just 17 per cent classifying themselves as such, compared to 31 per cent of men.

Furthermore, half of pension holders stated that they had never looked at where their pension contributions were invested, with almost 1 in ten (9 per cent) stating that they did not realise this information was available, and a further 11 per cent unsure on how to access it.

Over a quarter (27 per cent) of workplace pension holders said they were unaware they could change how their pension was invested, whilst 15 per cent of personal pension holders were unsure of how they could change their investment strategy.

Royal London has since announced the launch of a new campaign in light of the findings, entitled The Secret Life of Pensions, which aims to empower people and narrow the engagement gap.

Commenting on the findings and campaign launch, Royal London, head of investment solutions, Lorna Blyth, emphasised that auto-enrolment has brought “millions” of people into pensions, but that these results show “we still have a long way to go” to engage people with pensions.

She added: “If people don’t understand what a pension is then they cannot make the informed decisions that will help them get the best outcomes in retirement.

“What is positive though is when people become more aware of things such as responsible investment they do become more engaged.

“Contributing to a pension means people can not only benefit from the effect of long-term investment, they can also ensure their contributions are invested in a way that reflects their values.

“We must work to ensure people understand the powerful impact their pension can have.”

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