Most pension savers do not know how their pot is performing or even how it is invested, according to research by Axa Life Invest UK.
The study, which looked at people approaching retirement, found 77 per cent of individuals in their 50s and 60s do not know what their pension fund is invested in. In addition, it found that 71 per cent have no idea how their pot is performing.
According to Simon Smallcombe, managing director of the firm, there is no middle ground in terms of engagement and “ignorance is bliss” for many on pensions and retirement.
“There seems to be a gap between those who review the performance of their pensions on a regular basis and those who do not review it at all, suggesting that people take an all-or-nothing approach to their retirement savings,” he said.
The importance of keeping an eye on pension growth is coming to the forefront as new solutions enter the market, such as target-date funds, which throw into question the traditional default allocation to a balanced-managed fund. MM’s latest pensions spotlight further looks at how important asset allocation is when selecting pension funds, a factor many savers in their default funds do not consider.
The survey also found that 40 per cent of 50 to 65 year-olds in employer-sponsored defined-contribution schemes have never reviewed the investment performance of their pensions. Findings were based on a survey of 200 individuals in their 50s and 60s who have a defined-contribution pension.
