Panic among British workers about the state of their pensions seems to be easing. The number of scheme members requesting their projected pension based on their current savings plan has fallen by 9% since last quarter, according to the latest figures from the Aon Consulting Pensions Admin Tracker. This is still 36% higher than the corresponding quarter in 2008, Aon Consulting, the leading employee benefits and risk management firm, said.
Similarly, as equity markets claw back previous losses and talk of economic recovery increases, pension savers are displaying improved levels of confidence as witnessed by a fall of 17% in the number of requests for information regarding the current pound-value of their pension pot.
The Aon Admin Tracker analyses a sample of nearly 350,000 scheme members from 35 typical UK defined contribution (DC) and defined benefit (DB) schemes to provide an insight into how the economic environment is impacting public attitude and behaviour towards pensions.
The Q2 Aon Admin Tracker Key findings:
- Retirement quotations decreased by 9%
- Pension scheme members enquiring about how much their pension fund is currently worth (transfer out quotations) has dropped by 17%
- The number of new workers joining schemes fell by 37% (a total decrease of 73% since June 2008) mirroring the fall in recruitment activity
- Only 0.01% of the sample made changes to where their DC pension savings are invested, the same as last quarter
Colin Hamilton, commercial director at Aon Consulting, said: “The reduction in member requests for retirement information and transfer out quotations during periods when leading stock markets exhibit substantial increases suggests that confidence in retirement savings is returning.
However, if stock market performance is dictating confidence levels among savers, this would suggest a lack of understanding of the long term nature of pension saving.
Effective member communication and education has an essential role to play in explaining the long term nature of saving for retirement and ensuring that members are well informed during periods of economic volatility so that they do not rely on equity markets to solely dictate their concerns.”
