Pension News Pension Savers Ignore Investment Fund Options 18469795

Pension News Pension Savers Ignore Investment Fund Options 18469795 Fair Investment

Pension savers ignore investment fund options

24 August 2009 / by Rebecca Sargent

Almost a third of Britain’s occupational pension scheme members are paying no attention to where their pension is invested, research from Prudential has revealed.

In total, more than 2.5million defined contribution pension scheme members have never reviewed how their chosen pension is performing, while almost half have their money invested in the ‘default’ fund.

However, Prudential warns that failing to review pension investments or choosing the best fund could risk limiting the value of a person’s pension pot.

Commenting, Andy Brown, director of investment funds at Prudential said: “It is worrying that so many people who pay into a company pension scheme appear to be in this state of inertia and aren’t taking an active role in the management of their pension savings.

“You routinely check your savings, utilities, insurance cover, mobile phone contract and broadband arrangements to make sure you’re getting the best from them, and checking the performance of your pension should be no different,” he added.

According to Prudential, just 20 per cent of defined contributions pension holders say they took an active role in selecting the funds it is invested in, while just 13 per cent said they had seen an independent financial adviser to discuss fund options.

Mr Brown adds: “If you’re an employee paying into a pension scheme, you have taken the first important step towards building up a fund to provide you with an income in retirement but you stand a greater chance of maximising its value if you review your fund arrangements regularly.

“If you’ve chosen the ‘default’ option, it should be because it best suits your needs and not because you don’t understand or aren’t interested in finding out what else is available.”

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Written by Editorial Team