Many overlook their workplace pension, a future risk unseen
A significant portion of employees neglect their workplace pensions, impacting future financial security.
A recent study by My Pension Expert, involving 2,000 UK adults through an online survey by the independent market research agency Opinium, has highlighted a concerning gap in the awareness and engagement of UK employees with their workplace pensions.
The findings reveal a significant portion of the workforce remains disconnected from their retirement savings, with one in six employees admitting to never having checked the accumulated funds in their workplace pension schemes.
The investigation further uncovered that while 27% of individuals with a workplace pension have not reviewed their savings in the past year, an encouraging 19% have taken the initiative to check their pension in the last month. This suggests a varied level of engagement among the UK workforce regarding their pension schemes.
Despite the introduction of auto-enrolment, designed to bolster retirement savings, a staggering 12% of respondents are unsure of their enrolment status in a workplace pension, underscoring a critical gap in financial literacy and engagement.
Moreover, the research indicates a reliance on workplace pensions for future financial security, with 59% of UK adults with a workplace pension planning to depend on it to support their retirement lifestyle.
However, this confidence contrasts sharply with the lack of additional pension planning, as 52% of UK employees have not pursued any pension planning beyond their workplace pension enrolment.
Lily Megson, policy director at My Pension Expert, expressed concern over these findings, stating, “This research shines a bright and somewhat unflattering light on auto-enrolment workplace pensions. While it’s rightly hailed as a ‘game-changer’ for ensuring employees save into a pension, much more needs to be done to help people to better engage with their workplace pension, and retirement planning more generally.”
Megson’s comments underscore the necessity for enhanced efforts in financial education and the provision of pension-monitoring tools. She argues that without greater engagement and awareness, many could face unexpected challenges in securing a financially stable retirement.
The emphasis, according to Megson, should be on a collaborative approach between the private and public sectors to empower UK workers financially, ensuring they are adequately prepared for a fulfilling retirement.
This approach is essential not only for individual financial well-being but also for the broader economic health of society, as it ensures a more financially secure and informed workforce.
If you would like to discuss your company’s workplace pension as well as the issue of employee engagement with their pensions, please do not hesitate to contact us.