11% of savers say they couldn’t accurately describe what a pension is (1 in 9)
11% said they don’t know how much they contribute to their pension (1 in 9)
17% are unsure how much their employer contributes (1 in 6)
31% of women are not confident that they will have enough income for a comfortable retirement (1 in 3)
A simple lack of understanding of pensions – what they are and how they work - could be preventing workers from saving for their retirement, according to research from Moneyhub, the award-winning data and payments platform built on Open Banking and Open Finance principles.
The research revealed that one in ten (11%) respondents said they couldn’t accurately describe what a pension is, while a further quarter (24%) said they don’t understand the tax benefits of a pension.
Demonstrating the extent of the lack of engagement with pensions, savers were also largely unaware of how much they were putting into their pension, with 11% saying they don’t know how much they contribute, and a further 17% unsure how much their employer contributes.
Without an accurate understanding of pensions and what they are saving, consumers are at risk of not saving enough for retirement. Indeed 22% said they didn’t understand how much income they would likely receive in retirement based on their current pension savings and 28% were concerned they would not have enough to afford a comfortable retirement. This rises to 39% for 45 to 53 year olds.
In line with the well documented gender pension gap, women in particular were more likely to have a limited understanding of pensions, and how much they contribute. And concerningly, this lack of understanding has translated into 31% of women saying they are unsure they’ll have enough income for a comfortable retirement compared to 24% of men.
Savers are in danger of not being able to make the necessary decisions to ensure they are prepared for their later life if they don’t get to grips with how much they have in their pension and are contributing now. Through Open Finance, not only is this possible, but with the benefits of AI driven smart nudges and modellers, savers will be supported in making the best financial decisions for their circumstances.
With Moneyhub’s Open Finance powered technology, it is already possible for savers to view some of their pensions next to their savings, investments, mortgages and properties all in one place. Having one central, accessible place for savers to find, view and track every one of their pensions - including State, Workplace and Personal - will further encourage active engagement with pension savings. This is crucial to ensure consumers have a holistic view of their finances and can make confident, informed financial decisions.
Mark Horwood- James, MD of Moneyhub Personal Finance Technology comments: “A simple lack of information is set to impede millions of workers from enjoying a comfortable and secure retirement. It’s a real concern that such a high percentage of people continue to be unsure about their income when they retire. Also troubling to us is that these doubts are reflected in a disparity between men and women.
“Thankfully, with Open Finance technology available today, this information gap can be quickly filled. It falls on the government as well as employers to remove any impediments to engagement by ushering in the widespread use of new technologies such as Moneyhub.
“Having easy access to all their pensions in one place, and being able to view them alongside their other financial products such as savings or mortgages as well as their properties, will enable savers to make better decisions when it comes to preparing and planning for the life they would like in retirement.”
Notes to editors
Contacts
Ingrid Anusic Eleanor Ross
Marketing Director, Moneyhub Senior Account Director, Teamspirit (Moneyhub PR Agency)
ingrid.anusic@moneyhub.com ERoss@teamspirit.uk.com
M: +44 783 722 6553 M: +44 7393 758 446
Research Methodology
Research conducted by Censuswide among 1004 pension savers. The research fieldwork took place between 2nd August and 7th August 2023. Censuswide abides by and employs members of the Market Research Society and follows the MRS code of conduct which is based on the ESOMAR principles.
About Moneyhub
Moneyhub is a data, intelligence, and payments company which develops ISO 27001 certified software for Open Banking, Open Finance, and Open Data applications. Its FCA-regulated Open Data platform enables companies to quickly and easily transform data into personalised digital experiences and initiate payments. Its APIs and fully customisable platform provide data aggregation, insights, notification nudges, and payment systems. As a result, clients have the consent-driven data and analytics they need to create super-personalised offers, products, and services. Hundreds of organisations, spanning finance to media and retail, rely on Moneyhub’s award-winning technology.
For more information, please visit www.moneyhub.com.