Almost half of older workers are unaware that their pension has a choice of investment funds to choose from or even what their pension fund is invested in.

Research from financial wellbeing and retirement specialist Wealth at Work revealed that 49% of working adults with a DC workplace pension were unaware of what their pension was invested in.

The company said there seemed to be a general lack of pension understanding.

Some 29% of pension savers were unaware that their pension was even invested, while 38% said they were unaware that their pension had a choice of investment funds to choose from, a figure which increased to 44% for those age 55 or older.

Jonathan Watts-Lay, director, Wealth at Work, said: “It’s worrying that many people don’t realise that a pension is an investment, or even that they have a choice over how their money is invested in their pension.

“Particularly concerning is that this worsens for those approaching retirement as at this point people need to consider how they plan to generate a retirement income.”

He said that many workplaces give employees financial education and guidance to help them build understanding and engagement around their pensions and the options at-retirement.

He said: “Our experience shows that interactive financial education workshops are far more engaging than passive information on a website or leaflet.”

He suggested that early on in an employee’s career financial education should cover how pension schemes work, employer and employee contribution levels, tax relief, what funds they can select from, as well as how they can change the funds their pension is invested in.

Later on, around mid-career, he said, employees will also need to understand if their pensions and other retirement savings are on target, as well as how income may be generated in retirement and ensuring investments are being managed in line with this.

He added: “Once at-retirement, financial education or one-to-one guidance should help employees understand how to generate an income from their pensions and other savings, as well as how to seek further help including regulated financial advice.”

• Research was carried out online by Opinion Matters throughout 20/03/24 – 26/03/24 among a panel of 2,002 Workers, aged 18+ who have a defined contribution workplace pension.