Nearly nine out of 10 (88%) UK adults invested in defined contribution (DC) pension schemes cannot name, or do not know, all of the funds their pension contributions are invested in, according to research by Standard Life.
Its DC investments research, which surveyed 2,035 adults, also found that three-quarters (74%) of respondents aged 25-54 said they have a low-to-medium attitude to risk in relation to their investments.
Nearly two-thirds (62%) of respondents who currently contribute into a DC pension scheme also indicated that they had not changed, or even considered changing, the funds in which they invest within the last three years.
Ann Flynn, head of corporate marketing at Standard Life, said: “People do not always realise a level of risk is required to help generate the returns needed to achieve a decent standard of living in retirement.
“And for most, the words ‘investment fund choice’ strikes fear into their hearts so they shy away from making an active decision.
“Auto-enrolment presents a fantastic opportunity to get people engaged in their long-term savings. However, if this new wave of pension savers end up in investment funds which are not suitable for their individual needs, and they don’t review their investment choices, then we may have some problems down the line.”
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