Just under one-third (30%) of employees do not know where their pension savings go, according to research by Teamspirit.
Its survey of 2,000 people, also found that just 34% say they know their pension is invested in the stock market and other assets. Just over a fifth (22%) know it is invested but do not know where it is invested, while 12% believe the pension fund sets the money aside and it is not touched by anyone until they access their savings.
Almost three-quarters (74%) of employees with pension savings have made no changes to their pensions during the pandemic. Among those aged 35 – 54, 77% have not made any changes to their pension savings, with a further 24% not knowing where to begin if they wanted to make a change, and 15% not knowing that they can make any changes.
Among 18-34-year-olds, 27% believe that their retirement savings are set aside by a pension fund and left untouched, while 24% do not know where their money goes.
Adam Smith, managing director at Teamspirit, said: “The fact that so few people understand what their pension gets up to points to a huge, gaping knowledge gap. This needs attention. How can we expect people to check, monitor and engage with their pensions when so many don’t even know it can be checked and monitored?
“Unfortunately, this low awareness is widespread across all age groups, which means that we need to adopt more creative communication tactics to grab the attention of different audiences. A letter or email that lands in a pension holders inbox is only part of the solution. Communication and even general pension education need to be promoted on various channels. This means more content on social channels, more video, more games, more animation, more influencers. And dare I say it, it needs to be more entertaining.
“Think about your mobile phone; the average person’s thumb travels more than five miles a year scrolling through online content. Pension content needs to be thumb stopping content. Only then can we help people understand what their pension is and how it can help them in the future. Then we can start to transform financial services for the better.”