06 October 2023
Recent research conducted shows that less than half of UK adults know fundamental information about the state pension and a quarter of pension savers never check their pension.
Research by Moneyhub has found that the disinterest around pensions is more prominent in the over 55s, with 40% saying they never check the value of their pension and a further 20% only checking the value once a year. In comparison, younger generations are becoming more engaged with their pension. 48% of 16-24 year olds and 47% of 25-34 year olds said they check their workplace pension at least once a month.
Some of the key findings from the Moneyhub study, were:
- 25% never check their pension and a further 23% only check once a year
- growth of money apps is driving more engagement from young people
- commercial pensions dashboards could drive better engagement with future finances
- Moneyhub points to upcoming pensions dashboards as a key solution to solving the lack of engagement and savings shortfall within the UK.
Mark Horwood- James, MD of Moneyhub Personal Finance Technology, said:
“There is evidently a clear need, and a want, from consumers to gain a better understanding of their pensions and more regularly check in with their expected retirement income.’’
“However, it's not simply enough to engage more with your pensions, we must look at our finances holistically. Open Finance powered solutions enable customers to better understand all their finances, create lasting savings habits, help switch to better products and find some of their lost pensions. In turn this ensures they have the capacity to save more into their pensions, and make better decisions when it comes to later-life savings. Pensions dashboards when combined with holistic money management tools are a true game changer for the industry and its customers, and at Moneyhub we’re ready to help both today.”
Research from Royal London, uncovers how even though it’s been 75 years since the state pension was launched, less than half of UK adults know fundamental information about the state pension.
It found that over half of those yet to access their state pension (51%) either thought that everyone was automatically entitled to the full state pension amount or didn’t know who is entitled. Almost two fifths of people (37%) thought that men and women were entitled to the state pension at different ages, whereas the age at which men and women can claim their state pension was equalised in November 2018, almost five years ago.
Some of the key findings from the Royal London survey, were:
- fewer than half of those not yet receiving their state pension (46%) knew that men and women would receive the same amount if they had made equal National Insurance contributions (NICs)
- 45% did not know if married couples and individuals got the same or a different amount of state pension
- almost a third of people (32%) thought they got their state pension automatically and did not need to apply for it
- the average figure people thought the state pension paid being £534 per month, which is around £350 less than the current full monthly amount of £886 under the new state pension rules
- almost half (48%) of those below state pension age said that they couldn’t live on the state pension amount comfortably
- 69% of those yet to retire said that they had never worked out how much they need to live on in retirement
- the average monthly amount respondents said they would need in retirement was £1,216, which is 37% more than the full state pension amount.
Despite one in ten people not yet retired saying they would live off the state pension as their main form of income in retirement:
- 52% of those who haven’t accessed their state pension have never checked how much state pension they are likely to receive
- 45% have never checked their state pension age
- 71% of adults have never asked for a copy of their National Insurance (NI) record.
Sarah Pennells, consumer finance specialist at Royal London, said:
"The state pension is the foundation of most people’s income in retirement, but for one in five of those who’ve retired, it’s their sole form of income. Living on £886 a month isn’t easy, especially currently during a cost of living crisis, and around a third (32%) of those we surveyed who are currently receiving the state pension told us that they’re struggling and have to supplement it with other income or savings.
"I’d encourage anyone who has been putting off thinking about their retirement to make a start by getting a copy of their state pension forecast. Once they know that, they can work out how much income they’d need in retirement to afford the life they’d like and can begin to plan what they need to do with their finances to start to bridge that gap. There are plenty of free online tools and resources to help you.’’
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