Despite increasing economic pressures, as much as a quarter of savers never check their pensions; according to new research from Moneyhub, the award-winning data and payments platform built on open banking and open finance principles.
The Moneyhub research reveals a continuation of a lack of engagement that savers have with their pensions – a trend that has existed for years. In fact, 23 per cent of savers only check their pensions annually, with most of this proportion only falling into this category thanks to alerts about their pensions’ value in the provider’s annual statement.
Concerningly, this inertia surrounding pensions was found to be more prominent among those aged 55 and over, with 40 per cent saying they never check the value of their pension. A further 20 per cent only check the value once a year.
In comparison, younger generations are becoming more engaged with their pension, checking more regularly, likely thanks to the increasing ease of doing so through apps created by their pension providers. Forty-eight per cent of 16 to 24-year-olds and 47 per cent of 25 to 34-year-olds said they check their workplace pension at least once a month.
The findings highlight the important role that technology plays in encouraging engagement with our pensions. This is particularly important as increasing numbers express concern over whether they will have enough for a comfortable retirement and the cost of living drives some to reduce their pension contributions.
Moneyhub points to upcoming pensions dashboards as a key solution to solving the lack of engagement and savings shortfall within the UK. The Government Pensions Dashboard will enable people to find and view all their pensions including their state, workplace and personal pensions. Commercial pensions dashboards will find the same pensions, via the same central search mechanism, but crucially they will also let savers connect to other financial products they use, just like Standard Life’s Money Mindset app.
The power of the pension dashboard
Recently, Standard Life announced it is strengthening its partnership with Moneyhub with plans to deliver a commercial pensions dashboard. Moneyhub’s fully customisable white-label pensions dashboard will be embedded into Standard Life’s existing customer app, which incorporates a financial wellness tool, Money Mindset, which is also powered by Moneyhub’s Open Finance capabilities.
It already lets Standard Life’s members connect and see their bank accounts, credit cards, savings, ISAs, loans, mortgages, and property values next to their Standard Life pensions. Having access to a holistic view of their finances, allows people to make better long-term financial decisions and to support their short and long-term money goals.
Mark Horwood-James, MD of Moneyhub personal finance technology, commented: “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. Only by staying engaged can you course-correct early enough to make a difference in your later years.
“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 in 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.”