Around 46 per cent of people are unaware they receive tax relief on their contributions, according to research from TPT Retirement Solutions.
Nearly one in five DC savers (24 per cent) don’t know they can adjust their contribution levels, according to the study, which surveyed about 1,500 DC savers.
Nearly two-thirds (62 per cent) of DC savers who are qualified for a higher employer contribution after opting in, however, are simply receiving the minimum amount. Another 9 per cent are not aware that their employer makes pension contributions.
According to the findings, more education about DC pensions and how to maximise your job pension is required.
TPT has introduced live pension planning webinars and supporting materials for employers, resulting in two-thirds of attendees taking action on their pensions, such as increasing contributions and exploring financial advice. TPT plans to launch a new defined contribution product to simplify the transition to retirement, supported by digital tools for clear retirement options.
TPT Retirement Solutions DC director Philip Smith says: “DC pensions put responsibility for a member’s financial future firmly in their own hands. Helping people understand how workplace pensions work is therefore essential. If we want savers to take an active role in their retirement planning, it’s imperative that employers and all trustees provide them with the right information, tools, and support to enable them to make informed decisions.
“Over the last few years, improving member understanding of their DC pension has been one of our top priorities. We’ve introduced an extensive suite of support, initiatives, and educational tools, including an educational site for DC savers, personalised video annual benefit statements, a comprehensive new-joiner engagement programme, new pension savings tools and a series of live educational pension planning webinars.
“We’re now finalising our plans for the next phase of development, including significant investment in improving our digital experience and developing retirement solutions that better support members and make retirement simpler when they’re ready to start accessing their pension savings.”
