Workplace pension holders over twice as likely to be disengaged than personal pension savers

People with a workplace pension scheme are more than twice as likely to be disengaged with their pensions compared to those with personal pensions, research from Moneyhub has found.

It showed that 23 per cent of those with a defined contribution (DC) pension and 26 per cent of those with a defined benefit (DB) pension never checked their pension pots.

By comparison, 11 per cent of savers with a self-invested personal pension (Sipp) and 10 per cent with a self-employed pension never checked their pension.

Moneyhub described the disparity as “concerning”, with several of its interviews conducted with DC pension holders finding that they were unaware that their pension was an investment.

Furthermore, just 34 per cent of DB and 39 per cent of DC pension holders said they had a ballpark figure of how much they had in their pension pot, compared to 51 per cent of those with a personal pension.

Savers with workplace pensions also had less understanding about how to engage with their pension, with 13 per cent of DB and 15 per cent of DC pension holders revealing they did not know how to check their predicted pension income, compared to just 5 per cent of personal pension holders.

Moneyhub noted that pensions dashboards would likely bridge the engagement gap between workplace and personal pension holders.

“With the majority of employees relying on workplace pension schemes for funding their retirement, it is essential that action is taken to improve people’s engagement and interaction with their pension savings,” said Moneyhub Personal Finance Technology MD, Mark Horwood-James

“The government and pension providers are uniquely placed to embrace open finance technologies, like Moneyhub, to break down barriers to engagement and help support savers up and down the country.

“Knowing you have a pension, because you haven’t actively opted-out, is simply not enough to ensure you are financially prepared for later life.

“Having easy access to all your pensions in one place, and being able to view them alongside your other financial products such as savings or mortgages, will enable you to make better decisions when it comes to preparing and planning for the life you would like in retirement.”

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