Figures released by Aviva have shown the startling lack of engagement millions of savers currently have with their pension. More than a quarter of savers (28%) admitted to never reviewing their retirement savings, while almost a fifth (19%) of those with a pension said they review it less than once every 5 years. Gender also has a role to play. The number of women who are not engaged with their pension is particularly high with almost a third (32%) saying they never review their savings, compared to a quarter (25%) of men.
Aviva has released the figures to coincide with the launch of the Pension Finder Alpha project’s White Paper. The paper, which Aviva has helped draft, is the culmination of work by a cross-industry group exploring the components needed to create a Pensions Dashboard.
It is hoped a Pensions Dashboard will improve understanding and engagement with retirement savings so consumers are more likely to take action. Worryingly, Aviva’s figures show that only just over a quarter of people (27%) think that their current contributions into their company pension scheme will provide enough for them in retirement.
Clive Bolton, Managing Director, Retirement Solutions, Aviva UK Life, said:
“The lack of engagement with pensions is frightening. Ask most people what they earn now and they’ll have a pretty good idea, sometimes down to the penny, but most people have no idea what their pension is worth. A pension is your salary when you’re no longer working. Surely it deserves more than a glance at a statement once a year.
“That is why Aviva has been at the fore-front in calling for industry-led development of a pension dashboard. The launch of the Pension Finder White Paper today is a significant step forward but there is still a huge amount of work to be done.
“Our figures show that urgent action is needed to encourage people to take an active interest in their retirement savings. While the number of people reviewing their pension is worryingly low, our research shows that the main thing that does cause them to act is the arrival of their annual pension statement. We believe that the introduction of the pension dashboard would build on this and prompt more people to take action to ensure they are doing all they can to save for their retirement.”
As part of year-long study into people’s financial habits, Aviva asked consumers which events had caused them to review their pension. The most popular answer was receiving an annual statement from their provider (35%), followed by a pay increase (28%) and starting a new job (17%)3.
Full press release on www.aviva.co.uk