A Hand Adding A Pound Coin To A Glass Jar. Saving Money In A Retirement Fund Concept.

Six in ten pension holders want to consolidate their pots

Research has revealed that nearly six in ten pre-retirement pension holders with two or more pensions wish to consolidate these.

The study, conducted by Boring Money, found that:

  • 58% of savers with two or more pensions are keen to consolidate
  • 28% of savers have consolidated their pensions at least once before
  • 30% of savers already plan to do so in future

While these are relatively positive signs of pensions engagement, Boring Money’s research highlighted areas of concern elsewhere.

These included discovering that only 26% of pension holders had engaged with their pension scheme to change their investment choices. As such, many savers could be sleepwalking towards retirement without a pot that will meet their needs or be having their cash invested in areas they wouldn’t be happy with.

Furthermore, Boring Money found that less than half – 45% – of all savers had altered their monthly contributions at some point. Consequently, many savers may not realise how much more they need to be saving to get the standard of living they want in retirement. Combined with checking their investments, even a slight increase in monthly contributions could significantly positively affect savers’ long-term outlook and pension prospects.

Publicising the research, Boring Money’s CEO, Holly Mackay, commented: “Changing employment patterns and increasing job turnover create pension proliferation, at the same time as better digital solutions and the pensions dashboard show gradual steps towards better communications and visibility.

“Consolidation is on every provider’s radar as an obvious way to grow £AUA faster than targeting new money alone. I expect we’ll see a lot more innovation and noise in this space in 2022.”

People looking to part-time roles to supplement income

As well as looking at pension engagement metrics, Boring Money also found that 36% of pre-retirement pension holders plan to work part-time during their retirement as a means of supplementing their income.

If savers carry out this intention, that will lead to a significant reshaping of the UK’s workforce and inevitable questions about what this may mean for younger people.

At present, 26% of men over 67 are in some form of employment, dropping to 17% for women in the same age demographic.

On top of this, 30% of savers with an annual income exceeding £50,000 said they didn’t expect to ever fully retire. Is this because they fear they’ll be bored in retirement or a reflection on a lack of pension planning, meaning they’ll need to work to maintain the same level of income?

Is cash saving still a problem?

Boring Money’s research seems to indicate this is the case.

Its study found that 46% of savers expect to use cash savings outside of their pension or pensions as part of their retirement income.

The Financial Conduct Authority (FCA) has raised similar concerns recently, with worries that those with cash savings will see their pots eroded due to inflation. As such, the FCA is looking to put a system in place for pension providers to warn savers of the risks associated with holding significant cash.

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