Prudential Reveals UK Workers In State Of Pension Inertia
on: August 28, 2009, 8:18 am
research from Prudential shows that nearly a third (30%) of Britain's
8.8 million active occupational pension scheme members* pay no
attention to how their retirement savings are invested and 29%
– more than 2.5 million scheme members – have never
reviewed how their chosen pension fund is performing.
pension provider's study** also shows that 48% of workers aged
25+ have their money invested in the 'default' fund of their company
savers are failing to take an active role in managing their assets
to produce the best possible retirement income. Around 29% admit
they have never reviewed the progress of their selected pension
warns that workers who do not regularly review the progress of
fund to deliver asset growth, or simply select the default
fund offered by their employer without studying any other options
available to them or seeking advice, could then risk limiting
the value of their pension pot at retirement.
Brown, director of investment
funds at Prudential, said: "It's worrying that so many
people who pay into a company pension scheme appear to be in this
state of inertia and aren't taking an active role in the management
of their pension savings.
routinely check your savings, utilities, insurance cover, mobile
phone contract and broadband arrangements to make sure you're
getting the best from them, and checking the performance of your
pension should be no different."
urges workers who have not reviewed their pension investments,
especially during the stock market turbulence of the past two
years, to review them now as a priority to ensure they are correctly
positioned to take advantage of any market upturn.
pension scheme members are doing virtually nothing to ensure their
pension funds are invested in the best place to maximise growth
and maintain the right balance to protect fund values in the last
few years before retirement.
20% of defined contribution pension scheme members say they took
an active role in selecting the funds in which their pension is
invested from a range of funds offered by their workplace pension
scheme. A further 37% say they have never taken any other action
with their pension fund such as seeking independent financial
advice, talking to their employer or making additional voluntary
Brown continued: "If you're an employee paying into a pension
scheme, you have taken the first important step towards building
up a fund to provide you with an income in retirement but you
stand a greater chance of maximising its value if you review your
fund arrangements regularly.
you've chosen the 'default' option, it should be because it best
needs and not because you don't understand or aren't interested
in finding out what else is available."
it comes to paying more money into company pension
schemes, Prudential's research found that 37% of people with
a defined contribution pension have either made Additional Voluntary
Contributions to their pension fund or increased the amount they
* Source: Occupational Pension Schemes Survey, ONS, 2007 (latest
** Survey conducted by Research Plus from 2 to 7 July 2009 among
1,298 UK adults aged 25+ who have not retired using an online
"Prudential" is a trading name of The Prudential Assurance
Company Limited, which is registered in England and Wales. This
name is also used by other companies within the Prudential Group,
which between them provide a range of financial products including
life assurance, equity
release, annuities (including an income drawdown option),
savings and investment products like the unit trust and tools,
such as the tax calculator. Registered Office at Laurence Pountney
Hill, London EC4R 0HH. Registered number 15454.
3 Sheldon Square
020 7150 2657