Personal Pension  

One in five clueless about size of pension pot

One in five clueless about size of pension pot

Research by Partnership has revealed that not only are savings levels low but many have no idea just how prepared they are.

When asked how much they anticipate their entire workplace pension scheme might be worth when they retired, 35 per cent of people aged 45 to 64 said they did not know and 21 per cent admitted they did not have anything at all.

Worrying levels of ignorance around the full value of other typical retirement assets such as their private pension (23 per cent) early access savings (25 per cent) and fixed term savings (24 per cent) were also shown by this age group.

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Partnership said while you might anticipate that people who had 10 years or less until traditional retirement age may have a better understanding of their assets, 35 per cent of 55 to 64-year-olds did not know how much their workplace pension was worth and 20 per cent were unaware of their private pension’s total value.

The firm, which polled 3,100 people aged 45 plus in the third quarter of this year, added while some may be saving for retirement yet have little understanding of the value of these savings, others have yet to make this type of preparation.

About 28 per cent of 55 to 64-year-olds polled have no private pension and 20 per cent have no workplace pension, which suggests that some people will be heavily reliant on the state pension.

Andrew Megson, managing director of retirement at Partnership, said: “Planning for the various retirement eventualities is hard enough when you know exactly how much you do have but it is likely to be almost impossible if you don’t even know that.

“While it may take a little time, getting a better understanding of the value of your total assets will allow you to take practical steps to improve your retirement before it is too late.

“Lack of preparation can mean that people’s choices are restricted and they may need to make some very difficult decisions at retirement.”

Jonathan Hamilton, trainee financial planner at Nurture Financial Planning, said: “The initial inclination is to be amazed by this considered reflection of the retirement market place.

“Ignorance may well be blissful, but taking command of one’s destiny is a respectable and worthy aspiration. It is amazing to hear and witness people talk of money, but really have no understanding of the fact they have plenty and spending it might be apposite.

“Better still, people should be aware of the fact that gifting it to the taxman is not the most financially prudent plan.”