UK savers know less about what charges they are paying on their pensions compared to their compatriots in the USA, India and New Zealand, new research has found.
According to a study by the Centre for Business in Society at Coventry University, only 52 per cent of UK consumers understand the costs associated with their pensions, compared to more than 70 per cent in the USA and nearly 90 per cent in India.
The UK also had the fewest number of savers checking their pension statement on an annual basis (70 per cent), while India had the most (90 per cent.)
The report reads: “Based on the evidence, it is clear that while people in the UK have a pension and they are engaging with it, more can be done to increase the engagement level.”
“In the UK, despite plain English standards, greater clarity is needed regarding the cost of a pension and specifically how much a person in the UK contributes to their pension, after administration charges are deducted.”
While 90 per cent of Indians believed their pension was safe, less than two thirds thought the same in the UK.
The UK did have the highest concentration of workplace pensions among the sample countries, but had the lowest proportion of people holding a private pension.
The report recommends that the government should stress why individuals should hold pensions for the long-term.
It reads: “As the onus shifts to the individual, we would recommend for the UK that central government, along with the regulatory bodies, better communicates the benefits of having a pension and the governance measures already in place to make sure that people’s money would be safe.
“This governance, we propose, is particularly important given the recent poor publicity regarding some of the losses of certain pension schemes. We would encourage central governments to make clearer the benefits of joining a pension…or taking out a standalone pension at an early age, and the advantages of making regular payments over a long-term”