Research released by the National Association of Pension Funds (NAPF) shows many people in workplace pension schemes are unsure about how their savings are invested.
The NAPF’s report ‘What do pension scheme members expect of how their savings are invested?’ shows 39% of its survey respondents do not know where their pension savings are invested; with women being most unsure (52%), followed by those who work part time (50%) and young people aged 18-34 (48%).
Despite the existing lack of awareness about their pension investments the majority of respondents (63%) are interested in knowing where their savings are invested; including the countries, sectors and specific companies. This level of interest jumps significantly among people who work in the private sector (74%), compared to those working in the public sector (59%), and interest peaks among those with an annual income of more than £50,000 per annum.
A majority (65%) of pension scheme members identify the level of costs and charges as one of the most important factors for their employer to consider when choosing a pension provider. But cost isn’t the only thing that matters and 60% would be interested in their pension provider undertaking activities that support the long-term sustainable performance of the companies in which they invest. Indeed, a majority (53%) would prefer their employer to choose a provider demonstrating strong stewardship activity, even if it is 10% more expensive.
Joanne Segars, Chief Executive, NAPF, said:
“Today’s report shows pension savers clearly would like to know more about where their money is invested and the majority favour a pension provider with a strong stewardship agenda, even where it is a little more expensive. As automatic enrolment brings millions of new savers into workplace pensions, schemes, providers and policy makers should take stock and ensure arrangements, including the default fund, accurately reflect members’ investment preferences and their best long-term interests.”
Read the full report.
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