The number of people requesting retirement quotes in defined contribution (DC) pension schemes has almost doubled within a year, according to research published by Aon Consulting.
The Aon Admin Tracker revealed that retirement quotes rose by 56% overall, a 55% increase in defined benefit (DB) schemes and a 71% rise in DC. Aligning with an increase in retirement quotes, the research found that transfer out quotes have increased by 17% over the past year, up 20% in DB schemes and 8% in DC, illustrating the amplified financial concerns among scheme members as a result of the economic uncertainty.
However, despite this large increase in enquiries, the overall level of interest from members remains very low, with just 0.27% of the sample requesting retirement and transfer out quotes. So in spite of the current economic situation, members generally still do not appear to be demonstrating much interest or concern for their retirement provision.†
The research analysed a sample of nearly 350,000 employees from more than 35 typical UK DC and DB (defined benefit) schemes to provide an insight into how the worsening economic environment is changing public attitudes and behaviour towards pensions.
Despite the increase in enquiries and the very volatile markets this year, the majority of pension scheme members have not actually adjusted their investment profile. In March this year, only 0.02 % of DC members in the sample actively switched their funds.
Colin Hamilton, commercial director at Aon Consulting, said: “While figures for the Q1 Admin Tracker reveal a heightened anxiety among scheme members, the lack of investment activity may surprise some given the unprecedented year.
“However, minimal investment activity is not necessarily a bad thing in the current economic climate. Members must be well informed and switches made for the right reasons, always bearing in mind that their pension represents a long-term investment.”