Three in four (75%) people in the UK don’t know how much they have saved in their pension pot, new research has highlighted.
The analysis by Standard Life discovered that the number rises to 79% among those aged 45 to 64 years old. It is lowest among 18- to 24-year-olds, with 65% of this age group admitting they can’t put a figure on how much they have saved.
Dean Butler, managing director for customer at Standard Life, said: “Given the increased responsibility individuals now hold for their own pension savings, it’s worrying that the majority can’t estimate how much they’ve got in their pot – particularly those who are approaching or even in retirement now.
“Interestingly, younger generations are more likely to know how much they’ve saved so far. This may be because they are at the start of their working lives and are a bit more conscious of what comes in and out each month, and they are likely to have less pots to keep track of. Despite its huge success, auto-enrolment along with the fact UK workers tend to change jobs more regularly now has meant many workers further into their careers have multiple small pots – younger workers, in most cases, won’t have this issue. They might also be more used to a world in which long-term saving is entirely down to them – unlike older workers, it’s all they’ve ever known.”
Entitled Retirement Voice, the study further found that women are less likely to be aware of the value of their savings than men, 81% compared to 68% respectively.
In terms of how much money they need in retirement, women believe this to be £22,428 – significantly less than the £32,617 estimated by men.
Butler added: “The gender disparity seems to echo what we already know about the gender pension gap – women are likely to earn less throughout their lifetime, often because of leaving the workforce or going part-time for caring responsibilities and as a result they save less for retirement. It seems likely that this has caused women to engage less with their pension pots, leading to a lack of knowledge around how much they’ve saved.”
He believes it’s vital for people to engage with their finances as early as possible so they can plan their financial future.
“The best place to start is by checking what you currently have in your pension, and what this could equate to in retirement, and there are tools and calculators that can help with this. From there, you can see whether your current funds will provide the type of retirement lifestyle you want and, if not, you can make changes to improve your situation, such as increasing regular contributions or paying in a lump sum. You may need to make lifestyle changes to accommodate this, such as cutting back on everyday spending, so it’s important to take a holistic view of your finances to see what’s possible in both the short and long term,” concluded Butler.