Britons 'oblivious' about pensions

Millions of British adults have no idea which investor is looking after their pension, or how that money is being invested, new research has shown.

The research, carried out by Lincoln Financial Group, a major UK financial services provider, suggests two million UK adults remain in the dark about who is watching their pensions.

It also reveals nearly half (48%) of UK pension holders say they hardly ever go back and review their pension options after their initial investment.

Only 29% of people asked were currently working and saving in to a pension. Of those 16% were not sure where or who their pension is invested with.

Simon O'Connor, head of products and marketing at Lincoln Financial Group, says: "With people not taking the time to review their pension options, it not surprising that the majority are still unaware of the Open Market Option and so fail to shop around to get the best annuity for them on retirement.

"It is extremely worrying to see that so many British adults seem to overlook the importance of this decision and fail to prioritise a review of their retirement needs."

O'Connor says the Government and the financial services industry must do more to keep consumers informed and aware of their annuity options, to ensure they get the best match of retirement product for their circumstances.

The Pensions Regulator says it has recently started a campaign focused on improving outcomes for Defined Contribution scheme members.

It has published a leaflet entitled 'Making your retirement choices: think before you choose', which outlines the options available to members, including the Open Market Option, deferring the purchase of an annuity, and income draw-down.

The leaflet is designed for trustees to give to members in the six months before they retire to help them make a better choice about their retirement income.

The Regulator says it is also carrying out a study of a sample of pre-retirement literature to get a better idea of the delivery of information to people nearing retirement. It will use this research to make improvements on current practice.

Earlier this month, David Norgrove, chairman of the Pensions Regulator, warned the UK retirement age could be set to rise to 70 as people lived longer and saved less.

Norgrove told the Times: "The evidence is that people generally are frightened of saving for pensions. They think that pensions are very complicated."

To read the Pensions Regulator leaflet click here