More than one in four employees have never logged onto a website of phone app to check their workplace pension — according to new research.
This data shows the proportion of ‘pension ostriches’ remains consistent across all age groups, even among those approaching retirement.
The survey, by consultants Barnett Waddingham, found that in total 28 per cent had never checked their workplace DC pension either online or by phone to see how much it was worth, 11 per cent had only do so once, and a further 26 per cent had only done so a couple of times.
The research found this figure actually increased among older workers, with 37 per cent of those planning to retire within two years not using these easy access options to regularly check the value of their pension pots, relying solely on either annual paper statements, or not getting this information at all.
This apathy means that many employees are failing to engage with their workplace pensions on a range of other metrics. Barnett Waddingham found that only 41 per cent of people had ever increased their monthly pension contributions and 43 per cent had never used a pension calculator, to see what sort of income they were on track to get in retirement.
Meanwhile, it said 67 per cent of DC savers have never spoken to a financial adviser about their pension – while 12 per cent have done so once. The number of people who have spoken with an advisor doesn’t notably increase as people approach retirement, though men are far more likely to have done so than women (42 per cent vs 27 per cent).
The survey also found that almost three quarters of people (72 per cent) had never changed how their pension was invested. Barnett Waddingham adds that as well as remaining invested in the default fund, most workers are contributing the default amount – which is unlikely to be enough for a comfortable retirement.
Of the 41 per cent who had increased their pension contributions — 13 per cent have done it once, 15 per cent a couple of times, 7 per cent ‘a few times’, and just 5 per cent do so consistently.
This leaves 59 per cent of people, rising to 66 per cent of women, contributing the bare minimum — usually 5 per cent of their salary, with a further 3 per cent contribution matched by their employer.
Meanwhile, the survey found just 23 per cent of employees have ever put a lump sum of money into their workplace pension. Again this was more likely to be male employees (32 per cent of men versus 17 per cent of women).
The survey also showed that 26 per cent of people have previously opted out of their workplace pension altogether — a figure which is more prevalent among younger workers. This average rises to a 55 per cent of 18-24s and more than a third (36 per cent) of 25-30s.
Barnett Waddingham partner and head of DC pensions Mark Futcher says: “The UK’s auto-enrolment system has hatched a generation of pension ostriches. With pensions – and personal finances in general – feeling complex, overwhelming, and often disheartening, many savers are simply refusing to check the status of their pots, never mind making decisions to improve the outcomes. But burying your head in the sand won’t do you any good in the long run.
“Our latest analysis of the UK’s master trust landscape painted a picture of strong governance, good returns, and low fees. The problem lies in people saving too little, and employers failing to encourage better habits, like auto-escalation of contributions at the point of pay rise or career break. If everyone took twenty minutes to log-in to their workplace pension, use a calculator to check the expected pot at retirement, and consider the possibility of increasing the contribution by just 1 per cent this year, we’d be a big step closer to tackling the looming pensions crisis in the UK.”
