- Two in five (42%) respondents admit they don’t know the value of their accumulated pension pots
- One in four (23%) do not know what type of pensions they hold
- 4 in 10 (40%) people don’t know how much they should be saving into a pension to have the lifestyle they want in retirement
- Less than a third (28%) is saving at least 12% into a pension every month from their salary
New research from Aviva reveals that people in the UK are almost as likely to know the value of the contents of their wardrobe (34%) as they are to know the value of their pensions (38%).
In fact, many more people are likely to know the value of their house (58%), car (55%) and television (63%) than the value of their pension, which is often their single largest asset after their home.
Just over two in five (42%) respondents admit they don’t know the value of their accumulated pension pots, and 60% don’t know how much their pots would equate to in a retirement income or annuity when they do retire. This figure rises to 67% of 45-54 year olds and 69% of women.
Furthermore, almost one in four (23%) do not know what type of pension(s) they hold (i.e. final salary, SIPP, Trust scheme) in addition to any state pension entitlement, rising to almost a third (32%) of those aged 35-44. Those who are aware of the type of pension they have are, perhaps unsurprisingly, those aged 55 and over, with valuable defined benefit, or final salary, pensions.
Aviva’s study has also found that 4 in 10 (40%) people don’t know how much they should be saving into a pension to have the lifestyle they want in retirement, this figure increases to almost half (49%) of 35-44 year olds.
Aviva recommends that savers should follow ‘Three Rules of Thumb’ when it comes to saving into a pension:
- Actively save for your retirement at least 40 years before your target retirement date. To retire at 60 start saving at 20 years old.
- Try to save at least 12% of your salary into your pension every month - this can include money from your employer as well.
- Aim to have the equivalent of 10 times your salary in your pension pot by the time you want to retire.
Alistair McQueen, Head of Savings and Retirement at Aviva said: “There is no silver bullet that will help us short circuit the journey into retirement. But that does not mean we are powerless to act. The most positive action we can take today is to take control of our savings - consider where we want to get to in retirement and understand where we are starting from. We can then plan how to bridge the gap. It’s never too late to start saving and planning.
"The most positive action we can take today is to take control of our savings."
“Start by finding out how much you are likely to receive in a state pension, then spend some time reviewing your pension statements and find out the latest values – you may find you have several if you have moved jobs many times. Once you have the value of your various pots, use a simple pension calculator, like Avvia’s retirement planner, to work out what your pension might be worth when you retire.
“Previous research from Aviva showed that, amongst retirees, those who began planning early were nearly twice as content with their financial situation than those who made no plans. Finding time to plan may be the best investment we can make.”
Actions to help boost your pension pot:
- Check your State Pension forecast – https://www.gov.uk/check-state-pension to see how much you can expect to receive in your state pension at retirement age.
- Tax boosts: For every £8 you save into a pension, the tax man adds at least another £2. An extra £2 from the taxman for forty years, could boost the value of your pension by more than £10,000.
- Employer contributions: It is the law that every employer in the UK must provide their eligible staff with a workplace pension through auto-enrolment. They must contribute a minimum 3% into your pension. Try to maximise your contributions to maximise your employer’s boost. A generous contribution from your employer will make it a lot easier to hit the 12% target.
- Keep checking: Saving for your retirement should not be a “set and forget” activity. Use your annual statement to check that you’re on track for your retirement target.
- Budget and save: Every penny saved today can be used to fund your desired retirement tomorrow. And the more you save the sooner you should reach your target.
- Reframe your expectations: The long-standing state pension ages of 60 for women and 65 for men were set in the 1940s. Life expectancy today means you could live for at least another 20 years past this age. Focus on your expected full life, not just your expected working life.
- Shop around: When it comes to retiring there are various pension providers willing to help. The retirement incomes they offer in return for your amassed pension pot may differ. Find the best deal for you by shopping around.
Research commissioned by Aviva was carried out by Censuswide between 21st and 23rd July 2021 of 2007 nationally represented consumers. Censuswide abides by and employs members of the Market Research Society which is based on the ESOMAR principles.
Notes to editors:
- We are the UK’s leading Insurance, Wealth & Retirement business and we operate in the UK, Ireland and Canada. We also have international investments in Singapore, China and India.
- We help our 18.5 million customers make the most out of life, plan for the future, and have the confidence that if things go wrong we’ll be there to put it right.
- We have been taking care of people for 325 years, in line with our purpose of being ‘with you today, for a better tomorrow’. In 2021, we paid £30.2 billion in claims and benefits to our customers.
- Aviva is a market leader in sustainability. In 2021, we announced our plan to become a Net Zero carbon emissions company by 2040, the first major insurance company in the world to do so. This plan means Net Zero carbon emissions from our investments by 2040; setting out a clear pathway to get there with a cut of 25% in the carbon intensity of our investments by 2025 and of 60% by 2030; and Net Zero carbon emissions from our own operations and supply chain by 2030. Find out more about our climate goals at www.aviva.com/climate-goals and our sustainability ambition at www.aviva.com/sustainability.
- Aviva is a Living Wage and Living Hours employer and provides market-leading benefits for our people, including flexible working, paid carers leave and equal parental leave. Find out more at https://www.aviva.com/about-us/our-people/
- At 31 December 2021, total Group assets under management at Aviva Group were £401 billion. Our Solvency II shareholder capital surplus is £8.8 billion as at 31 March 2022. Our shares are listed on the London Stock Exchange and we are a member of the FTSE 100 index.
- For more details on what we do, our business and how we help our customers, visit www.aviva.com/about-us
- The Aviva newsroom at www.aviva.com/newsroom includes links to our spokespeople images, podcasts, research reports and our news release archive. Sign up to get the latest news from Aviva by email.
- You can follow us on:
- For the latest corporate films from around our business, subscribe to our YouTube channel: www.youtube.com/user/aviva