Half of UK staff have never reviewed their pension plans

Almost half (48%) of UK employees have never reviewed their pension plans, according to annual consumer research by Baring Asset Management.

One in five (21%) of respondents have reviewed their pension plans in the last year, with a further 12% unsure of the last time they underwent a review.

Of those who have reviewed their pension plans, 38% went with a default option available to them. Of these, 19% said the explanation they received for how the funds would be invested was poor or was not explained to them at all.

The research also revealed 33% of those who had reviewed their pension could not say whether they had chosen the default option for their pension contributions. Almost one in five (19%) of those who did not know where they had invested their pension were fast approaching retirement.

Only 11% of employees who have reviewed their pension plans took recommendations given to them by their financial advisor.

Marino Valensise, chief investment officer at Barings, said: “The fact individuals seem to continue to take little or no interest in financially planning for their retirement is of real concern.

“The industry needs to improve the way in which pension advice is given so people better understand the levels of risk and return they can expect from their portfolios. With the markets behaving so turbulently over the past few years, pension holders should be sure to review their schemes on an annual basis.

“I would urge them to seek independent financial advice when they do so to ensure their portfolios are correctly positioned for their needs and not just put into the default option funds for the sake of ease.”

Read more research on planning for retirement