Millions of retirement savers have no idea of how much their pension pots are worth or how their cash is invested, according to research by two leading financial firms.
More than 40% confessed they never thought about how the continuing global financial crisis affected their retirement plans and cannot remember how their funds are invested, says international investment firm Baring Asset Management.
Even more (45%) admitted they had never reviewed their retirement plans.
Although retirement apathy is common among those still working, more who have already retired are choosing to self-manage their investments.
Almost a quarter (23%) personally select their funds, the highest level ever recorded by the survey, which started in 2008.
Poor planning for retirement
Marino Valensise, Chief Investment Officer at Barings, comments: “This research shows that a worrying proportion of people are not making the necessary plans to ensure their pension provides as they need it to in retirement.
“It is concerning to think that despite the very high profile global financial crisis that we are experiencing not more people have considered and acted upon the need to address how it may be affecting their funding in retirement.
“A large proportion is happy to accept the default setting which may not necessarily offer the best fit in terms of risk and reward. People who fail to take an interest in understanding the type of pension they have or indeed where it is invested are burying their heads in the sand.”
Meanwhile, another retirement savings report, this time from The Nationwide, found less than 10% of savers know how much their pension fund is worth.
Another 36% admit they only have a ‘rough idea’ of how much they have in retirement savings.
Knowledge is key
The building society also revealed that few savers know how much income their pension fund will generate from an annuity in retirement.
Almost half (49%) said they had an idea, but 39% had no clue.
John Wilkinson, head of protection and investments at Nationwide Building Society, said: “In any walk of life, knowledge is key and the same applies to pensions. It is crucial to check your pension pot regularly to see how much is saved, and to ensure that the funds are performing as well as they should.
“Don’t ignore the issue because it won’t go away. Make sure you read your pension statement and understand how much you have and how much it may be worth when you retire. Remember, it is the value of that pot, which will ensure whether you have a relaxing, enjoyable retirement or not.”