One in five savers have never checked their pensions, research by The People’s Pension reveals

Nearly a fifth of savers (19 per cent) have never reviewed how much is in their pension savings, new research from the leading workplace pension provider People’s Partnership has revealed.

A survey from the provider of The People’s Pension, conducted by YouGov, also found that two in 10 (21%) savers check their pension just once a year while a fifth (19 per cent) check their retirement savings once a month or more often.

The research also found:

  • Nearly a third (32 per cent) of people don’t know how much they have saved in all of their pension pots.
  • Only one in 10 pension savers had an app for their pension, compared to 9 in 10 people (91 per cent) who use one for banking, around six in 10 (58 per cent) who use an app to order food to be delivered and more than four in 10 (43 per cent) who check their investments on an app.
  • More than six in 10 people (64 per cent would check their savings more often if they had a mobile app for their pension.

David Meliveo, Chief Commercial Officer at People’s Partnership, said:

“At a time when most people aren’t saving enough for retirement, it’s worrying that the vast majority of savers have never checked their pensions – leaving them with no idea how much they’ve saved, or maybe even where it’s saved.

“For most people it’s now an everyday habit to use apps for shopping, banking, or even investing, but when so few pension savers check their savings that way, it’s clear that the industry could do much more to engage their members and help them plan for their future. 

“Through initiatives like our new app and retirement planner, we aim to make it easier for workers to keep track of their savings and help them to make the right financial decisions for their future selves.”

The People’s Pension app allows its 6.7 million members to check how much they have in their account, how the scheme is investing their money, and aims to help them plan financially for their future. The app will be regularly updated to include new features, which will soon include the newly launched Member Rewards, which are special offers and deals available only to members of The People’s Pension.

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Nearly one in six retirement savers have never checked their pension savings – survey

Nearly one in six (16 per cent)1 of retirement savers admit that they have never reviewed their pensions, new research from People’s Partnership2 has revealed.

The survey, commissioned by the provider of The People’s Pension, also shows that nearly a quarter (24 per cent) of those questioned review their pension savings less than once every year, while a fifth (20%) check once a year and one in ten (11 per cent) said they check once every six months. The findings follow the publication of Government statistics3 which show that nearly 4 in 10 of working adults are not saving enough for their retirement.

The YouGov poll also shows that nearly half (45 per cent) of those who took part are not confident that they have put enough thought into their retirement plans, while only a quarter (25 per cent) said they were.

The poll also shows that:

  • Men are nearly twice as likely (32 per cent) than women (18 per cent) to have confidence in their preparation for retirement.
  • People living in the East of England and Wales are some of the least confident regions in the UK about their retirement plans.
  • People living in the London were the most confident about their retirement plans.
  • Nine per cent of men surveyed said they reviewed their pensions once a week or more, compared to one per cent of women.

The findings have been published to coincide with Pension Awareness Week4 and People’s Partnership, which provides The People’s Pension to six million UK savers, is promoting four simple steps for people to become more engaged with their pensions:

  • Sign up for an online account with your pension provider.
  • Make sure your personal and contact details are up to date.
  • Read your annual statement, checking the projected savings your current level of contributions will give you.
  • Name the person you want to benefit from your pension in the event of your early death.

Kevin Martin, Group Director of Customer Services at People’s Partnership, provider of The People’s Pension, said: “It’s clear from our research that many workers are ill-prepared for retirement, which is a concern given that we know that millions of workers are not saving  enough.

“There are simple steps that a person can take to ensure that they are better prepared for retirement, including signing up for an online pension account, naming a beneficiary, checking your annual statement and ensuring your details are updated so your provider can stay in touch.

“The findings also show that men have more confidence in their retirement arrangements than women, which is further proof of the gender pension gap which won’t be closed without government intervention.”

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Pension saving continues to remain a top priority despite cost-of-living pressures

New research1 from People’s Partnership2 suggests that the cost-of-living crisis isn’t negatively impacting the UK’s retirement saving habits, with just two per cent of pension savers admitting they have stopped paying into a pension in the last six months.

This is compared to almost four in 10 pension holders (39%) choosing to eat out less, one in five (21%) cutting back on holiday spending, more than four in 10 (44%) buying cheaper brands or ‘own label’ products, and a third (33%) reviewing their direct debits or standing orders.

Despite the current economic climate, the workplace pension provider, which provides The People’s Pension to more than 6 million people across the UK, also found that only 4 per cent of pension holders would consider pausing their retirement saving in the next 12 months, while 4 per cent said they would also think about reducing the amount they pay into their pension in the next year.

Whereas half of those questioned (50%) would buy cheaper brands or own label products, almost half (46%) would go out less often, just under two-fifths (39%) would review their direct debits or standing orders, and more than a third (35%) said they would cut back on holiday spend. Interestingly, seven per cent of respondents claimed they would look to increase their pension contributions in the next 12 months.

Commenting, Phil Brown, director of policy for People’s Partnership, said:

“We cannot underestimate the financial pressures facing people across the UK at the moment, with inflation at a 40-year high. For some, reviewing what they’re paying into their pension will be the right thing. However, with 60 per cent of people across the UK not saving enough to maintain their current standard of living in retirement, it’s really reassuring that despite the current economic climate, pensions remain a priority for people who are looking at other ways to cut back before touching their pension pot.

“It is clear that the record levels of retirement saving, which is in no small part due to the introduction of automatic enrolment 10 years ago, means that pensions are as important as they ever have been to UK workers.”

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Less than half of UK savers care about the charges they pay on their pension – latest research

Fewer than half of UK adults with a pension (48%) say they ‘care’ about the charges they pay on their pensions, compared to seven in 10 who pay close attention to what they pay for a mortgage (71%) or current bank account (70%), latest research from B&CE, provider of The People’s Pension1 has revealed.

A YouGov poll of 1,618 UK adults2 with a pension found that, of those who say they don’t care about what charges they pay on their pension, almost one in five (18%) haven’t got round to looking into or thinking about what they are paying, 16% think they don’t have enough currently saved for charges to make a difference and 14% say they don’t believe charges will make a difference to their pension savings when they come to retire, despite there being clear evidence that higher charges can negatively impact somebody’s retirement savings over the long term.

Meanwhile, a further 14 per cent say they trust that their pension companies’ charges are reasonable, just over one in 10 say that pension charges are too complex to understand (11%) and 10 per cent that it’s too difficult to find out what charges they pay.

Today, in a bid to improve transparency, the provider is calling for all pension schemes to include their charges in pounds and pence on annual statements.

The findings of research come as B&CE3, provider of The People’s Pension, a leading automatic enrolment provider in the UK, announces that it has now given £20 million back to its members in rebates through its charging structure4.

Phil Brown, director of policy at B&CE, said:

“This research is further evidence that the average saver doesn’t understand the impact that charges can have on their pension pot. At a time when people are naturally watching what they spend, it’s important that consumers are aware of what they are paying for their pension, which is potentially the most valuable asset many people own.

“Total transparency around charges is vital. We’ll be adding charges, in pounds and pence, on our members annual statements this year, and are calling on other providers to do the same.”

The survey also found that low charges were important to more than a quarter of respondents (27%) when it came to one of the top three the most important feature of a pension, with only the rate of return on their money invested (36%) and being run by a well-known/trusted company (34%) being considered more important.

The provider believes that the Value For Money (VFM) Framework, currently in development by the FCA and TPR, should be included on pension dashboards to ensure savers have transparent and comparable information before making a decision. It is also calling for the new VFM regulations to be applied to the retail market as well as workplace pensions.

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Why an engagement season will benefit pension savers

Ask most people to write down a list of ‘must dos’ and it’s a fair bet that not very many will mention the need to learn more about their pensions.

We in the industry are under no illusion that in most cases learning more about retirement saving is not a number one priority because, for many retirement seems a long way off and, let’s face it, pensions are complicated and somewhat dull.

That’s why we’re fully supporting the recent announcement from Pensions Minister Guy Opperman that later this year, as we celebrate 10 years of auto-enrolment and the millions of people it has helped save towards their future, the UK will see a new Pensions Engagement Season. The season will see providers from across the industry join forces in a campaign designed to help people find their pensions and discover how much they have saved.

The new initiative puts retirement savers at the heart of government strategy and enable the industry to communicate with 30 million retirement savers in a co-ordinated way.

More must be done to connect with pension scheme members

We know that the average worker leads a very busy life and many are more than likely to put off dealing with things that they don’t easily understand and don’t appear to be urgent. Of course, those of us in the business know that pensions saving is a long-term pursuit that needs thought and planning. But we must get better at landing those core messages with the wider public.

When you consider that many workers move jobs regularly throughout their career, meaning potentially a variety of different pension pots, so anything that wakes people up to what they’ve got and where they can find it is crucial. It will also enable consumers to compare how much they pay in charges for each of their pensions. This level of transparency will help savers make key decisions such as whether they should consolidate their pensions into one pot.

Pension statements key to effective engagement

We have long believed that pension statements should be the focus of any good engagement strategy. Our statements, which will soon adopt the new simplified format, direct members to our online portal. So, it won’t be long before the introduction of the potentially game changing pensions dashboards takes customer engagement to the next level.

At The People’s Pension, we deal with thousands of emails and telephone calls from some of our 5.7 million members every week. While the nature of the queries we receive is wide and varied, it’s not uncommon for people to only have a basic grasp on how much they have saved. Some know very little, not just about what they have but why they have it. This means that the education and awareness that the new season will bring, will be as welcome as it is crucial.

Great customer service is at the heart of what we do, and we are extremely proud of how we engage with our membership. So, this new government initiative will only improve how the pension industry interacts with savers.

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This article was written when we were B&CE, before we changed our name to People’s Partnership in November 2022.

Savers are at risk of losing out if Value For Money framework is not included on pension dashboards

B&CE, provider of The People’s Pension1 which serves 1 in 6 workers across the UK, has warned that savers are at risk of losing out if the proposed Value For Money (VFM) framework is not included on pension dashboards.

New research2 from the leading pension provider has found that more than two out of five pension holders (43%) are likely to move their savings from one pension provider to another if they could do so via a website that allowed them to see all their pensions in one place. But more than four in 10 (45%) wouldn’t know what to look for when switching pension providers, which risks them making a decision which could lead to a poorer retirement outcome.

When asked what would influence their decision if choosing to move providers, more than a third of pension savers (36%) said saving money on charges would be a factor, 34 per cent would be swayed by the rate of return promoted by the pension fund, and more than one in 10 (12%) would consider moving to a company with a better website or app.

Following the recent launch of the Government’s consultation of the draft Pension Dashboards Regulations3, B&CE believes that the Value For Money Framework4, currently in development by the FCA and TPR, should be included on pension dashboards to ensure savers have transparent and comparable information before making a decision. It is also calling for the new VFM regulations to be applied to the retail market as well as workplace pensions, following research from The Pensions Policy Institute (PPI) which found a significant charging gap between members of uncapped retail schemes and capped master trusts5.

Commenting on the research findings, Phil Brown, director of policy at B&CE, provider of The People’s Pension, said:

“The Government’s recent announcement detailing further regulations for pension dashboards will allow the industry to take the next big step towards making this hugely important innovation a reality. Our research shows that seeing all their pensions in one place may make it more likely for savers to transfer their savings to one provider, but they have little idea of what to look for to make the best decision for them.

“It’s vital for the FCA and TPR’s Value For Money framework to be clearly displayed on the platform, otherwise savers will not know for sure what’s the right move for them. Pension dashboards have the potential to revolutionise pension saving but this will only happen if consumers are provided with complete transparency.”

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Growing workplace pension pots are a recipe for greater government scrutiny

It’s fair to say 2021 was not a vintage year for many things, but for consultations it was a bumper twelve months. A bumper twelve months for consultations – not only in quantity, but in complexity and the operational demands that policymakers intend to make of pension providers.

It would be tempting to imagine this was mere chance and that this level of activity might reduce – but this, I think, would be extremely optimistic. It is unlikely that we have even reached the highest tide of intervention yet.

This is because workplace pensions are starting to become genuinely significant. Not just for the delivery of future income in retirement but also as flows of investment. Government departments other than the Department for Work and Pensions (DWP) are eyeing up what pension funds could be used to achieve. So far, we have seen a tentative move to encourage pension funds to increase their investments in infrastructure by amending rules relating to performance fees and the price cap. We’ve also been required to help combat climate change by putting in place processes to identify and mitigate climate risk.

Reforms on the horizon

At the same time, the UK continues to pursue a raft of reforms designed to increase engagement with pensions and the value for money obtained by savers. These reforms could be seen as gradually retro fitting the UK pension system while in-flight. Gradually taking us to the place it would, in an ideal world, have been rational to start from, when designing a mass DC-based pension system more than a decade ago.

These reforms include the continued promise of contribution increases, requirements around annual statements and dashboards, pursuing an efficient system for the consolidation of small pots, and the push for smaller schemes to consolidate unless they can demonstrate that they deliver value for money.
There are many wider government policies which could have some degree of impact on workplace pensions, meaning it is very important that the bigger picture is considered with retirement savers’ needs at the heart of any long-term strategy.

The consequence of not having a longer-term strategy in place is less civil service resource being applied to testing a proposition, and thus a greater likelihood of ill-thought through policies. In the pursuit of the short-term advantage drawn from newspaper headlines, there is every chance a policy designed to achieve something else altogether, may be casually allowed to damage the first objective of pensions – which is to provide retirement income.

The interest of departments other than the DWP in the sums held by pension schemes is unlikely to abate. A consequence of Brexit is historically low flows of foreign direct investment. The long-term consequence of Brexit is also lower government revenues than would otherwise have been the case. Simultaneously, the pressures on the UK government to do more to deliver on net-zero will also increase. This is because there is currently very little substance behind its ambitions to deal with the two main causes of UK carbon emissions and deliver either a full roll out of electric vehicles or to deliver a replacement for the domestic use of natural gas. It’s difficult to predict what it will do if it has to deliver last-minute crash investment programmes.

The growing importance of DC pension pots

We are also inexorably moving towards the time when retiring generations are no longer relying on defined benefit (DB) pensions. This will inevitably mean that defined contribution (DC) pensions will become more salient for individuals as part of their pensions. We already know how powerful the politics of the State Pension are in the UK. The intention behind workplace pensions was that mass DC would become the vital bolt-on to the State Pension. We can suppose that in a similar fashion, mass DC will come to hog the headlines too; unsurprisingly, as for most of the population, the DC pension will become the difference between something better or retirement on the poverty line.

We are not yet at the stage where workplace pensions feature as the centrepiece of electoral platforms. More established workplace DC regimes, like that in Chile, are already there. However, we can already see the forces that will propel us in that direction. 2021 was busy, the rest of the decade will be too.

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This article was written when we were B&CE, before we changed our name to People’s Partnership in November 2022.

Landmark anniversaries show how far an industry has come

In 2022, The People’s Pension and auto-enrolment will be 10 years old and we’ve both come a long way in that time.

The People’s Pension now has 5.6 million members and more than £16 billion of assets under management. We’re a core provider in a system which has brought more than 10 million workers in the United Kingdom into pension saving – something that was a dream just a decade ago.

Like many other national workplace pension saving systems, the UK’s auto-enrolment regime is still being refined as it matures. The government has either promised to enact or is considering a range of changes in 2022, which will impact on pension schemes and their members. There are other items which are at the review stage. We also think there are a couple of areas where the government and regulators need to look at how recent rules are being implemented in practice.

Timetable for reforms is needed

The government has promised to change some of the initial auto-enrolment rules to ensure that employees save more towards their retirement. These amendments would lower the age limit for auto-enrolment to 18 and calculate people’s pension contributions from the first pound they earn.
We’re also calling on the government to lower the £10,000 earnings trigger to the lower earnings threshold for National Insurance – of £6,240 – to help 1.3 million more people, the clear majority women, save through auto-enrolment. We hope that during 2022 the government will set out its timeline for making these improvements.

The DWP will also need space in the legislative calendar to pursue another major pension reform. The minister has rightly been pressing workplace pension providers to come up with a low-cost consolidation system for small pots. The outline of such a system is now available. To be made operational, however, it needs the DWP to put in place a statutory framework. Two areas which are not yet ripe for any rule changes but will be under review in 2022, are annual statements and retirement products in workplace schemes.

Learning lessons from abroad

Our wish list for items we would like the government and regulators to look at in 2022 also includes enforcement of value for money and greenwashing investments. The first would, of course, only follow once the government concludes its current work on how to measure it. But the lesson from Australia is that value for money rules only start to have an impact on the market once the pension regulator begins to check that it is being applied rigorously.

Pension schemes are also required to play an important role in combatting climate change. However, without better guidance as to which kinds of investment are genuinely sustainable, there is a risk that competition could drive down standards. Some schemes may be tempted to undertake superficial activity to signal green credentials to customers, where the investment risks releasing increased amounts of carbon in the future.

We look forward to celebrating the two significant anniversaries in 2022, while continuing to work to make the saving experience easier and more attractive for employees.

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This article was written when we were B&CE, before we changed our name to People’s Partnership in November 2022.

Why did I join a different financial services business?

So, I was intrigued when the opportunity came up to join B&CE – provider of the largest independent UK master trust, and a leading financial services profit-for-people organisation.

Building financial foundations for life

I found the idea of focusing on doing what’s right for members, with no need to satisfy shareholder investors, an exciting and liberating prospect. I wanted to join an organisation where our combined efforts could help make a difference to millions of UK savers.

B&CE’s vision of being a different financial services business made a lot of sense to me.

Using profits to help people

So, how do B&CE go about providing value for money and investment options for 1 in 6 adults and still generate enough profit to directly benefit its members?

Well, as we don’t have to pay shareholders, we can put profits to good use supporting our members.

Here are some examples of how we’ve done this:

  • Closing legacy pensions products

We moved members from older more expensive legacy pensions products into our better-performing and cheaper master trust – we chose to fund the move on their behalf for their benefit.

  • A new charging structure

Last year we introduced a rebate on our management charge and we’re now returning c.£1mn  to members in reduced charges every month – a figure that’ll increase substantially the more members save. We believe this is the right thing to do as it incentivises people to save more for their future.

People have entrusted all pension providers with protecting their hard-earned money and that doesn’t only mean keeping it safe, it means making sure charges are fair and proportionate and good returns are generated. A big part of delivering that sits with good financial control and making sure that monies are available at the right time to fuel growth and provide products and services customers need now, and will need in their future.

Grow and protect our members’ money

We need to ensure the business remains financially strong and future-proofed for our members, so further increases in scale are important to us – our size is absolutely correlated to the positive role we want to play in wider society.

Whether it be through our parliamentary work on pension scams or our calls on the government to lower the earnings trigger, our aim is to improve the pensions industry for all savers.

Greater scale gives us greater influence over where and how our members’ money is invested.

Use profits to help people today and tomorrow

Quite simply, we want to help our members become financially stronger, today and tomorrow, and to help them build better financial foundations for life. Find out more about what makes us a different financial services business

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This article was written when we were B&CE, before we changed our name to People’s Partnership in November 2022.

Helping members make sense of pensions

When it comes to pensions, we know what many people might be thinking – ‘we don’t need to worry about our pension’ or ‘the State Pension will be there for me when I retire’. But the truth is, this isn’t always the case. Our Recorded Online Update could help your employees or employer clients get their heads around these often-misunderstood subjects.

Encourage your employees or clients to get involved

Our update aims to answer the pension questions that really matter to your employees or employer clients. So why not share it with them?

Simply download the email template in our communications toolkit.

Giving our members a voice

Why did we record this update? Well, we wanted to give our members the chance to ask questions and hear directly from those who look after their pension savings. Our experts highlight some key topics for them to consider, so we can try to improve their life in retirement and showcase the importance of saving into a workplace pension with The People’s Pension.

Our video is split into sections, so you can watch it all in one go or by topic. Based on the questions asked by our members, the update covers topics including:

  • Consolidation – combining pensions
  • Responsible investment
  • Protecting your pension

Don’t miss out – watch our Recorded Online Update video.

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This article was written when we were B&CE, before we changed our name to People’s Partnership in November 2022.