Despite widespread concerns about retirement affordability, many UK workers are failing to actively engage with their pension savings, according to new research from financial wellbeing and retirement specialist WEALTH at work.
The research, conducted with 2,000 UK workers with a defined contribution pension, found that one in five (20%) employees have taken no action on their pension in the past 12 months.
The figure rises to over a quarter (26%) among those aged 44 to 54, a group moving closer to retirement, where engagement becomes increasingly critical to ensure they are on track. Notably, 14% of employees say they never review their pension.
This is despite over a third of employees (38%) fearing they will never be able to afford to retire, highlighting a disconnect between people’s concerns about retirement and the actions needed to improve outcomes.
Even among those who do engage, activity remains limited. The research shows that in the past 12 months, just two-fifths (40%) of employees have checked the value of their pension, while only around a quarter (28%) have logged into their pension account or app, highlighting that overall engagement remains low despite ready access to information. Of particular concern is that just over a quarter (27%) of people aged over 55 have looked at what they might have at retirement.
There is also evidence that many people lack a clear understanding of their pension and how it works, with just over a quarter of employees (27%) unaware that their pension is invested.
Encouragingly, 32% of employees say they would like a better understanding of how their pension is invested, while 36% want more information about how much they need to retire comfortably. This suggests that improving understanding could be a key way to drive greater engagement.
WEALTH at work’s research comes as wider industry research highlights a broader gap in financial understanding. The Money and Pensions Service estimates that around 22.5 million UK adults do not feel they understand pensions well enough to make informed retirement decisions, while around 46% lack confidence in managing their money.
At the same time, recent research from the Pensions Policy Institute suggests that retirement decisions are often made reactively rather than as part of a clear plan, reinforcing the need for more structured and personalised support to help individuals understand their options and make informed choices.
Jonathan Watts-Lay, Director, WEALTH at work, comments:
“Auto-enrolment has been hugely successful in helping more people start saving for retirement, but many aren’t regularly checking or engaging with their pension. This means people could be missing chances to improve their savings or spot gaps early.
“Many people also say they are unsure how their pension is invested or how much they need for a comfortable retirement, which can make it harder to take action.
“It’s important that people build their confidence and understanding of pensions over time, with support including financial education available through the workplace. Taking small steps, like checking your pension regularly, can make a big difference.
“As retirement gets closer, it becomes even more important to understand your options and what your savings might mean for your future income. Access to one-to-one retirement guidance via the workplace can help people make informed decisions when they come to access their pension. It can also help them decide if they need further support including investment advice. It’s important that people speak to their employer to understand what support is available and how it can help them.
“Ultimately, staying engaged and getting the right help at the right time can help people make the most of their savings and achieve a better retirement.”