More than six in 10 defined contribution (DC) pension savers are not making use of higher employer contributions eligible to them, according to research from TPT Retirement Solutions.
The survey, which polled around 1,500 DC savers, found that almost two-thirds (62%) who are eligible for a higher employer contribution once they opt in are only receiving the minimum amount. A further 9% are unaware that their employer is contributing to their pension.
The study also found that 46% of people are not aware they receive tax relief on their contributions. Furthermore, almost one in five DC savers (24%) are unaware that they can change their contribution levels.
Commenting on the findings, Philip Smith, DC director at TPT Retirement Solutions, said it is “imperative” that employers and all trustees provide employees with the right information, tools and support to enable them to make informed decisions.
“DC pensions put responsibility for a member’s financial future firmly in their own hands,” said Smith. “Helping people understand how workplace pensions work is therefore essential.”
TPT Retirement Solutions is a workplace pension master trust scheme serving over 2,600 organisations and more than 425,000 members.
“Over the last few years, improving member understanding of their DC pension has been one of our top priorities,” said Smith, who added that the “next phase of development” would include “significant investment” in improving the digital experience and making access to pension savings simpler