Pension scheme savers admit they ‘don’t know’ where their savings are invested but would like to know more

• Savers say cost and charges are one of their top concerns but show a preference for long-term investment strategies, even at short-term cost

Research released today (Thursday) by the National Association of Pension Funds (NAPF) shows many people in workplace pension schemes are unsure about how their savings are invested. 

The NAPF’s report ‘What do pension scheme members expect of how their savings are invested?’ shows 39% of its survey respondents do not know where their pension savings are invested; with women being most unsure (52%), followed by those who work part time (50%) and young people aged 18-34 (48%).

Despite the existing lack of awareness about their pension investments the majority of respondents (63%) are interested in knowing where their savings are invested; including the countries, sectors and specific companies.  This level of interest jumps significantly among people who work in the private sector (74%), compared to those working in the public sector (59%), and interest peaks among those with an annual income of more than £50,000 per annum. 

A majority (65%) of pension scheme members identify the level of costs and charges as one of the most important factors for their employer to consider when choosing a pension provider. But cost isn’t the only thing that matters and 60% would be interested in their pension provider undertaking activities that support the long-term sustainable performance of the companies in which they invest. Indeed, a majority (53%) would prefer their employer to choose a provider demonstrating strong stewardship activity, even if it is 10% more expensive.

Joanne Segars, Chief Executive, NAPF, said:

“Today’s report shows pension savers clearly would like to know more about where their money is invested and the majority favour a pension provider with a strong stewardship agenda, even where it is a little more expensive. As automatic enrolment brings millions of new savers into workplace pensions, schemes, providers and policy makers should take stock and ensure arrangements, including the default fund, accurately reflect members’ investment preferences and their best long-term interests.”

Read the full report.

 

Notes to editors

The NAPF is the leading voice of workplace pensions in the UK. We speak for 1,300 pension schemes with some 16 million members and assets of around £900 billion. NAPF members also include over 400 businesses providing essential services to the pensions sector.

About the research Opinium Research surveyed 1,064 UK adults (18+) with an occupational pension between 1 and 8 May 2014. A slight majority was male (56%).  A majority were 55+ (59%), with 33% aged 35-54 and 8% aged 18-34.  A majority self-identified with a religion.  With respect to the employment status of respondents:  a majority worked within the public sector (50%) as opposed to the private sector (42%); approaching half of respondents worked full-time (44%) with 15% working part-time.  44% of respondents had a personal income level of £20k-50k per annum; a further 34% had a personal income level below £20k per annum. 

Stewardship activity as articulated within the preface to the Stewardship Code “aims to promote the long term success of companies in such a way that the ultimate providers of capital also prosper.” Further, the Code describes stewardship as being more than just voting. Activities may include: monitoring and engaging with companies on matters such as strategy, performance, risk, capital structure, and corporate governance, including culture and remuneration. Engagement is purposeful dialogue with companies on these matters as well as on issues that are the immediate subject of votes at general meetings.”

Contacts

Lucy Grubb, Head of Media and PR, NAPF, 020 7601 1726 or 07713 073023, [email protected]

Eleanor Bennett, Press Officer, 020 7601 1718 or 07825 171 446, [email protected]