Nearly 12 million people have never reviewed their pension plans and a further 1.37 million people have not reviewed them in the last five years, according to research by Baring Asset Management.
The research found that of the 52 per cent of people who have reviewed their pension plans 41 per cent could not remember if they had chosen the default investment option for their pension scheme.
Over a quarter of people in the 18 – 24 and 25 – 34 age groups chose the default investment option compared with just 10 per cent of those in the over 55 age group.
While 54 per cent of people were clear on the asset allocation of the default option, 33 per cent were not clear and another 13 per cent could not remember the details of where their pension funds were being invested.
Nearly half the respondents who have revised their pension plans have not been advised on the appropriate asset allocation for their age and life stage and Hughes says people should review their pension schemes on an annual basis.
Baring Asset Management chief investment officer Michael Hughes is urging people to carefully consider the asset allocation of their pension portfolio on a regular basis to make sure it is in line with their age, lifestyle commitments and number of years to retirement.
Hughes says: “These statistics are very worrying. It is incredible to see that so many people have no idea where their money is being invested or, indeed, whether their pension is producing the returns necessary to support them in retirement.
“Coupled with the fact that people are not putting aside enough funds in general for their retirement, it’s clear that many people could face a serious shortfall when they reach retirement age.”