Nearly three-quarters or 74 per cent of workplace pension savers report low or no ownership of their pensions, according to SEI.
According to the “Creating an Ownership Mindset” report, nearly three-fifths or 59 per cent of members do not feel attached to their pensions, with this feeling being most common among those who have saved the least. Exceeding half or 52 per cent of those with pots between £50,000 and £100,000 and three in ten or 31 per cent of those with pots over £100,000 reported feeling cut off from their pensions.
The report shows a distinct divide between contribution and ownership, with four out of five people or 80 per cent saying they like to feel in charge of their money but only one out of five people or 18 per cent saying they feel in control of their pension.
The majority of participants think that they will have financial security in retirement as long as they receive a pension. My company set up the pension, and I trust that they are making sure I am paying in enough to enjoy a good retirement, said nearly two-thirds or 65 per cent of respondents. Concerningly, seven out of ten or 70 per cent people who currently pay the minimum company and employee payments feel this way.
Members are innately conscious of the fact that they could be doing more. Around 78 per cent of members believe they should be better knowledgeable about pensions, however, this opinion is not currently being followed through on. Four-fifths state that they are unsure of what will happen when they retire and wish to withdraw funds from their pensions.
SEI Institutional Group, EMEA and Asia managing director of defined contribution and solutions Steve Charlton, says: “While auto-enrolment has greatly succeeded in getting people to save for their futures, our research highlights an ownership problem when it comes to their pensions. The current engagement model has not been working well enough to shift the dial, and by all accounts, fixing the ownership gap won’t be easy. A fundamental shift in industry thinking is required.
“By focusing on engagement, we have been starting in the wrong place, driving push behaviours—such as telling, explaining, and stating—which don’t create ownership. There’s an assumption that if we just communicate more clearly and directly, people will understand it. Our research shows that this is a flawed theory and that we must foster a deeper emotional connection between members and their retirement savings.”