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Daily Insurance Industry News
Tuesday 17th of July 2018
May 24, 2012

DC pension savers shy away from investment decisions

by Gill Montia

Story link: DC pension savers shy away from investment decisions

DC pension savers shy away from investment decisions

According to research from Standard Life, nine out of 10 Defined Contribution (DC) pension investors can’t name or don’t know all the funds in which their pension contributions are invested.

However, almost half of those questioned said they felt their investments reflected their attitude to risk.

The research also indicates that three quarters of DC pension respondents aged 25 to 54 have a low to medium attitude to risk but nearly two-thirds said they hadn’t changed, or even considered changing, the funds in which they invest within the last three years.

Additionally, people don’t always realise that a level of risk is needed to generate returns that will provide a decent retirement income and for most, the words “investment fund choice” strike fear in to their hearts, so they shy away from making an active decision.

Standard Life’s head of corporate marketing, Ann Flynn, describes the findings as “alarming” explaining: “On one hand, the majority of people told us they are not familiar with the pension funds in which they invest … on the other hand, half said they still feel confident that they are in the right investments for them.”

She adds: “These are conflicting messages, and very worrying when you consider that fund selection plays such a key role in determining how much you will receive in retirement.”

Ms Flynn advocates easily accessible investment solutions and clear information and tools to help investors engage with their investment decisions.

 

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