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29 November 2017

Majority of savers risking retirement blues by saving in the dark...

• People enrolled in a pension scheme has hit an all-time high[i]
• However, the vast majority (69%) of those investing for their retirement have no clue or just a vague idea how much they have saved, leaving them potentially unable to afford retirement
• Less than half (50%) of savers know which provider their pensions savings are with
• Average saver now has multiple pensions pots, meaning the likelihood of losing track has significantly increased
• A fifth (21%) of these savers have no idea how to track their old pensions pots down

The number of British workers enrolled in a pension is at a record high, with auto enrolment schemes playing a major part, however many workers are ‘saving in the dark’ and not keeping track of what they have saved, or who they have saved with, leaving them at risk of being unable to afford to retire.

According to OneFamily’s research, one in three workers (32%) say they have no idea what they have saved and a further third (37%) say they only have a vague idea.

There is also a significant number of workers who have no idea who their savings are with. Just under half (47%) of savers know who their pensions are held with, leaving many unsure or completely in the dark about who they have saved with.

With the era of the lifelong profession all but over, workers are now more likely to have many different jobs throughout their career, and are finding it increasingly difficult to keep track of their pensions savings. OneFamily’s research shows that on average, UK adults are likely to have two pension pots, with over one in ten (13%) having at least three.

For those who have lost track of their pension pots, finding this missing money is no easy task. Just a third (30%) would know what to do, with the majority of savers saying they would need some help (34%), and a further fifth (21%) saying they would have no idea what to do. Some savers have just given up entirely, with 7% admitting they won’t bother to track them down as it probably isn’t worth their while.

This is borne out in Government statistics that show there is currently over £400 million in unclaimed pensions savings in the UK[ii].

Simon Markey, OneFamily CEO, commented: “It’s great that so many people are saving into pensions but the reality is that savers are not thinking about what this will add up to when they retire, resulting in many facing a significant shortfall. It’s also harder than ever for many savers to put enough away for their later years. This in part explains the increasing popularity of lifetime mortgages to fund later years, where we have seen new customers increase by nearly 60% in the in just the last year[iii]. At OneFamily we offer a range of lifetime mortgages to suit different customer needs.

“Regardless of your financial plans for retirement it’s important to try and keep track of any pensions savings you have, and this can be done by contacting old employers or using the government’s Pension Tracing Service which is free of charge. An industry-wide pensions dashboard is also under development and due to launch in 2019, which will help people to see all their pensions in one place in a convenient online platform.”

For useful information on managing your finances visit the OneFamily Hub and the Pensions Tracing Service can be found by clicking here.