Pension engagement remains 'major challenge' despite increasing financial awareness

Over two-thirds (67 per cent) of UK adults have not logged into their pension online over the last 12 months, research from Canada Life has revealed, with this figure increasing to over three-quarters (78 per cent) for those over 55.

Of those who had not logged into their pension in the past 12 months, 16 per cent simply were not interested in doing this, 15 per cent did not know how to access their pension online, while 9 per cent found it too complicated.

In addition to this, over half (56 per cent) of UK adults stated that they had not received a pension statement that they read in this period.

However, Canada Life noted that the lack of engagement is at odds with the findings that nearly seven in 10 (69 per cent) UK adults paid closer attention than usual to their finances in the last year, with 62 per cent reviewing or making changes to their finances amid the pandemic.

This trend was most prominent amongst 18-34 year olds, with 72 per cent reviewing or taking action, such as paying off a credit card, changing contributions to a savings account, or switching bank account provider.

The increased attention to finances also extended to pension savings “for a smaller group”, with 17 per cent of adults with a private pension increasing the amount they are saving into this.

Furthermore, 22 per cent of those with more than one private pension, such as a workplace or personal pension, have consolidated these into a single fund.

Commenting on the findings, Canada Life technical director, Andrew Tully, argued that the uncertainty caused by the pandemic has prompted people to pay more attention to their finances, warning however, that a "major challenge still remains with pension engagement".

He continued: “Despite auto-enrolment changing the face of the pension ecosystem, not enough people are reviewing their pension and taking the relevant action to ensure they are in the best possible position when approaching or in retirement.

“This is amplified by the alarming fact that a significant number of people aren’t aware that they can log into their pension online and get at minimum, a basic sense of how much they have saved.

“It is clear that as an industry, we need to do more to make financial management as easy as possible.

"Many people find the process of reviewing a pension and taking action a daunting prospect; we encourage them to engage with an expert financial adviser to make this feel less of a burden.”

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