Forty-five percent of non-retired British adults say that they have never reviewed their pension according to research conducted by Baring Asset Management.
The research also suggested that 23% of workers choose “friends and family” to provide pension advice, up 8% compared to figures from last year. For those aged 25-34 the figure rises to 27% who ask advice from friends and family, compared to 25% who ask advice from professional financial advisor or accountant.
The retirement income that future pensioners can expect will depend at least in part on the performance of their pension fund. Regularly reviewing a pension fund can give the opportunity to switch or make adjustments if a fund is not performing up to scratch and ensure that the level of risk involved is closely matched to the attitude of the saver.
When asked when the last time they had changed their pension arrangements to reflect their changing attitude to risk, 38% said that they has never done so, while 5% said that they had done so but more than a decade previously.
The report also suggested a marked lack of awareness over the importance of pension asset management. According to the research over a third of workers chose the “default” investment option when they reviewed their pension and 41% couldn’t remember which option they had selected.
In spite of these figures 58% of non-retired Britons said that they consider it their responsibility to ensure that they fully understand the way in which their pension assets are allocated.
Marino Valensise, Chief Investment Officer at Barings, said:
"Millions of people may be exposed to poor asset allocation and inappropriate levels of risk due to a refusal to review their pension investments regularly and with the correct levels of advice.
While it's good that the majority of people see it as their personal responsibility to monitor and understand their pensions, they need to follow this up and make sure they are speaking with their financial advisers. This is more important than ever given the current volatile economic environment."
"Understanding pension investments is more important than ever to ensure that it will provide appropriate financial support in retirement.”