Pensions experts are calling on people to check their workplace pensions regularly to ensure they are saving enough for their future.
Recent research by Moneyhub has revealed that a quarter of savers never check the value of their workplace pension, while 23% only check their pension once a year. A similar study carried out by Smart Pensions reported that over half of defined contribution pension holders check their pensions once a year or less and do not know if they are saving enough for a comfortable retirement.
Younger savers were more likely to engage with their pensions, according to Moneyhub, with 48% of 16 to 24 year olds and 47% of 25 to 34 year holds checking their workplace pensions on a monthly basis.
Stuart Price, Partner and Actuary at Quantum Advisory, says: “This latest research highlighting that the younger generations are becoming more engaged with their pensions is really encouraging. Now, the industry, together with government, need to keep driving this interest so that regularly checking workplace pensions becomes the norm for savers of all ages.
“The planned expansion of auto-enrolment for 18 to 22 year olds from April next year is a step in the right direction in terms of increasing employee participation from an earlier age, providing a solid foundation of saving for retirement from the start of young people’s working lives. This is an area that the pensions dashboard, when it comes to fruition, could really capitalise upon to help with further engagement.
“These changes, combined with teaching financial literacy from an early age, will aid young people on their journey to financial stability and independence. However, further action needs to be considered to reach those current savers who are not checking their workplace pensions regularly, or at all, and who may be at risk of not saving enough for a comfortable retirement.
“While education and awareness may assist, in reality what we need is people saving more. This is particularly difficult for low income earners who will have less money to save in the first place. Government could step in to legislate an increase in the minimum employee and employer contributions, freeze tax thresholds to incentivise additional contributions or set a flat tax rate of 30% for all, a radical thought which would redistribute some of the tax breaks to lower earners.”