Younger adults are more knowledgable about where their pension is invested when compared to older savers according to new research from Pensions UK.
These counter-intuitive findings highlight a generational divide about pension investment decisions and how savers interact with their retirement savings.
The survey shows younger savers are not only better informed but more likely to have taken action on their investment choices.
However Pensions UK stressed these findings come against a background of low levels of public understanding on pensions.
Overall the survey found that 31 per cent of those aged 18 to 34 say they know what their pension is invested in, compared with 21 per cent of those aged 35 to 54.
In total 21 per cent of younger savers said they had made changes to their pension investments compared with 12 per cent of middle-aged savers.
Interest in supporting domestic investment is also higher among younger adults. Around 22 per cent say they would prefer their pension to be invested in UK companies even if returns were lower, compared with 13 per cent among older groups.
Across the wider population, Pensions UK says its research indicates there is appetite for pension investment in the UK, but only under certain conditions.
Around 32 per cent of savers say they would prefer their pension money to be invested in the UK if returns are comparable with overseas investments. A further 16 per cent say they would prioritise UK investments even if that meant lower returns.
However, the majority of savers continue to prioritise financial performance above all else, suggesting that domestic investment initiatives will need to demonstrate strong outcomes for pension members.
While awareness that pensions are invested has increased slightly, the survey shows deeper understanding remains limited.
Around 77 per cent of savers now recognise that their pension money is invested, up from 74 per cent in a similar survey last year. However, only 24 per cent say they know where their pension savings are invested, a modest increase from 20 per cent in 2025.
Support for government encouragement of pension schemes to invest in UK companies has also declined. Half of savers (50 per cent) now support the idea, down from 60 per cent a year earlier.
The research also suggests caution among the public about government involvement in investment decisions. Some 44 per cent of savers believe the government should not tell pension companies where to invest their money, compared with 26 per cent who think it should.
The survey also highlights ongoing confusion about whether pension savings are invested in UK companies or domestic projects.
Around 61 per cent of savers say they do not know whether their pension includes UK investments, while only 14 per cent say they are confident that it does.
Pensions UK said the findings underline the need for clearer communication to help savers understand how their retirement savings are invested.
Pensions UK director of policy and advocacy Zoe Alexander says: “Younger savers appear more confident when it comes to understanding and engaging with where their pension money is invested. But even among younger savers, there are big knowledge gaps.
“That’s why it’s so important that while trying to improve financial understanding, we must make sure the system works well for savers who take no or little action.
“This year’s findings also reinforce a very clear message. The public is open to the idea of greater UK investment, but only when it supports strong returns.
“People want good outcomes, not political direction, and any policy push must keep savers’ interests at its heart.”
Alexander added that government and industry must work together to ensure pension investment reforms both improve outcomes for savers and support long-term economic growth.