Majority of savers interested in their pension but need more help to save for a comfortable retirement

Today’s research is new from Penfold the digital pensions platform, ePensions, found that 71% of respondents said they were interested in their pension pot. This suggests that there are high levels of engagement. Yet people still aren’t saving enough, with one in five (19%) working adults in the UK saying they only have up to £5,000 currently saved in their pension and a further 19% saying they don’t know how much is currently in their pot.

The research also finds that if the value of their pension pot increased, so would savers’ interest in their retirement savings. 71% stated that they would be more invested if the value of their pension pot rose, while 27% said it wouldn’t affect their level of interests.

When asked at what value they would become more interested in their retirement savings, an equal proportion (20%) said their interest would grow when their pot hit £25,000, £50,000 or £100,000. A further 14% said they would be more interested at £75,000.

However, these figures are relatively small in comparison to the £254,420[1]People must have enough money saved to retire comfortably. This is a clear indication of how many people underestimate the amount they need.

This lack of education is further emphasised by the fact that 16% of people don’t know how much they’ll need to save in their pension pot for their desired standard of living, a figure which rises to 25% among those aged 55-64 and 24% among those aged 45-54. This is particularly concerning as these people are closer to retirement and have less time to save.

Penfold believes that high levels of interest for pensions could be a good thing for the industry. A greater number of savers engaging with pensions, even those of low value, will drive engagement, which in turn will give pension providers more insight into how to encourage people to save more for retirement.

Chris Eastwood, co-founder of Penfold, said:

“Our research shows that fundamental change is needed for the pensions industry to be fit for today’s saver. It’s not good enough that a significant proportion of people are still in the dark about how much they need to save to achieve their desired standard of living after retirement. This is where education can help. It is clear that savers are interested in preparing for their future. But the industry is not doing enough to engage them.

“Simply put, the pensions industry needs a rebrand. We need to focus on communicating the accessible and flexible tools that are available to people to help them achieve their pension goals. The outdated practices and complicated jargon will only deter people from saving.

“Penfold’s easy to use platform engages savers with complete transparency over fund performance, the ability to check your balance and manage it on your phone, and the power to vote on issues that you care about by offering sustainable investment plans. It’s this freedom and accessibility which will ultimately drive engagement.”

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