Pension knowledge gaps revealed: Are you engaged with your retirement plan?

New research from Aviva has shone a light on the extent of pension knowledge gaps among UK adults. While 53% of people believe they are knowledgeable about pensions, only 35% can correctly identify a defined benefit scheme and 34% understand what a defined contribution scheme is. Additionally, 20% are unaware of their own pension type and 57% do not realise that the government contributes to pensions through tax relief.

While over half (55%) are unaware how their pension is invested, 81% of respondents haven’t altered their investment strategy, with a quarter citing it’s because they don’t know enough, or didn’t realise they could.

Almost 70% of people in the UK have between one and five pension pots, while 20% are unaware how many they actually have. Nearly a third (35%) of those who know where their pensions are, don’t know how to access them. While only 15% have consolidated their pensions, 46% are interested in doing so but are unsure what steps to take to achieve it.

WHAT ABOUT THE STATE PENSION?

Half of UK adults don’t know how much they’ll receive from their State Pension and 32% are unaware of the age they’ll qualify (according to Standard Life). Over half (51%) don’t know how much the full new State Pension is – it’s currently £11,973 a year – while 52% don’t know how to find out their entitlement and 34% are unaware that National Insurance contributions determine the amount they’ll receive.

ENGAGE WITH YOUR PENSION AND MAKE A RETIREMENT PLAN 

Your pension is a major part of your retirement strategy, so you really can’t afford not to be on the ball. Knowledge is crucial. We can support you to make well-informed decisions – your future-self will thank you.

Find out more about how our expert retirement planners can help you get on top of your pensions or schedule a free, no obligation, consultation with a professional adviser.

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.