According to recent research for Standard Life, three in five (63%) pension holders do not know the total value of their savings and less than half (45%) know what income this could generate in retirement. Although awareness increases slightly with age, even the majority of those approaching retirement are unaware, with less than half (49%) of 55s and overs admitting to knowing the value of their pension pots.
The research also found that more than two-fifths of pension holders (43%) have multiple pots (two or more pensions). The Department for Work and Pensions (DWP) reported earlier year that UK adults work for an average of 11 employers** during their career, so it is no surprise that so many people accumulate multiple pension pots. Older Brits, who have had the opportunity to work longer and enrol on more employee pension schemes, were more likely to have three or more pensions – with 21% of 45-54 year old pension holders having three or more. However, only a third (34%) of those in this age group know the total value of these pots.
The research also demonstrated that there are not just age divides in the pension pot pickle; there are also gender differences amongst pension holders. Men are more likely to accumulate more pension pots – with one in four (24%) having three or more, compared to just over a tenth (13%) of women.
With the recent increase in the state pension age it is especially important people understand the total value and likely income of their multiple pensions pots. This will allow them to plan ahead so they can adjust the amount they save, review and change which funds they are invested in and potentially plan an early retirement.
The Government's long term plan is that most pension pots will be consolidated from one to another as people move jobs, but it may be some time before this is implemented and it is not certain whether it will pick up pension pots accumulated before that point.
Commenting, Standard Life’s Alistair Hardie said:
“Many in Great Britain have multiple pension pots and very few actually know the total value of their savings and less than half of us understand what income this could equate to in retirement. For someone in their 30s the projected state retirement age will be 70. Anyone aiming to retire before the state pension age should start paying attention to the value of their pension pots now in order to set appropriate and realistic goals. Having multiple pension pots and lots of statements to read through can make it more challenging for people to keep track of their expected income in retirement. One way to save time and keep things simple is to consolidate your pension pots, if it is the right option for you. This is something people should discuss with their financial adviser. ”
|
