Moneyhub showed that 13% of pension investors don’t think merging is worth it, and 14% intentionally keep their investments separate.
According to new research from Moneyhub, the data and payments platform built on open banking and open finance principles, roughly one in eight (13%) pension savers don’t think it is worth their time and effort to combine pensions, and another 14% prefer to actively leave their pension pots separate.
According to Moneyhub, people who adopt this mindset may end up forgetting some or all of their pension funds or putting their retirement funds in low-yielding investments.
Additionally, according to recent study, 88% of those with occupational pensions have at least one pension that is unclaimed, and the total amount of missing pension pots is projected to be £26.6 billion.
These figures may be explained by the difficulties customers encounter when attempting to find lost or outdated pensions as well as their general ignorance of pensions. Eight percent more people do not know that they can merge their pensions into one.
A Moneyhub survey found that 13% of pension savers had pooled their savings and 23% plan to. The 25–34 age group liked consolidation most, with 42% planning to and 16% having done so. If the operation is complex or onerous, many may put it off.
The Government’s Pensions Dashboard can help users find misplaced pensions, although consolidation is not advised. Commercial dashboards may solve the entire problem, according to Moneyhub.
Locating all pensions, providing follow-up services like consolidation and retirement modeling, and giving users a complete understanding of their financial situation and how to improve their retirement outcomes improves commercial pension dashboards.
Achieving “better financial outcomes in later life
“Structural challenges within the UK pension market, such as fragmentation and low consumer engagement, are driving inefficiencies and undermining savers’ ability to achieve decent retirement savings,” says Moneyhub Personal Finance Technology’s MD, Mark Horwood-James.
Over the course of their working lives, employees are taking on various responsibilities and longer careers, which results in multiple pensions for them.
“The study is unambiguous. Consolidating many pots is beset by a disturbing inertia. Managing multiple pensions at once can be simpler when you have more investing options and pay fewer costs.
“Although the Government’s Pensions Dashboard will be a significant milestone, the real winners will be the providers who use open finance technology like Moneyhub’s in conjunction with the dashboard. They will have the ability to lower engagement barriers and facilitate the process of pooling pension funds.
“Users will be able to view their pensions alongside all of their other financial products on commercial dashboards, giving them a comprehensive view of their financial situation. This will empower them to take action and make better financial decisions now, which will improve their financial results later in life.
Employed by companies like Aon, Mercer, and Standard Life, Moneyhub’s Personal Finance Technology platform can already assist customers in locating their pensions and providing them with more information about what to anticipate financially during retirement. With the use of their unique saving and spending data, individuals may plan and modify their habits with the aid of tools such as our retirement modeler. The sector is waiting for the government’s central architecture and dashboard, but the necessary follow-up actions and dashboard experience can already be facilitated by technology.
