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Pensions & Retirement

37% of workers unclear about their workplace pension, Penfold finds

More than one in five employees said they did not understand how their pension works.

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37% of workers unclear about their workplace pension, Penfold finds
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More than a third (37%) of UK workers said their workplace pension scheme was either not clearly explained or they have no memory of any explanation, according to research from Penfold. 

Nine in 10 (89%) employers said they felt confident explaining their workplace pension scheme to employees, with most believing their staff fully understood how their scheme works. 

More than one in five employees said they did not understand how their pension works, while one in 10 said they had no memory of ever getting a pension explanation from their employer.

Chris Eastwood, CEO and co-founder at Penfold, said: “Auto-enrolment has been a huge success in helping millions more people start saving for retirement. 

“But being enrolled in a pension isn’t the same as understanding how to make the most of it. 

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“Our research shows a clear gap between what employers think they’re communicating and what employees are actually taking away.”

Eastwood added: “Many workers still aren’t sure how their pension works, what they’re paying in, or what it could mean for their future.”

Penfold’s ‘The UK Pension Gap’ report found 26% of employees feel anxious or confused when they think about their pension. 

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40% of employees check their pension once a month, while nearly one in ten have never checked or reviewed their pension. 

Only 29% said they trusted their pension provider most to explain their pension to them. 

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65% of employers said they already see their pension as a competitive advantage.

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Eastwood said: “Clear communication shouldn’t stop after someone joins a company. 

“People need regular, simple ways to understand how their pension is performing and what it means for their future. The answer isn’t simply sending people more information. 

“If millions of workers still find pensions difficult to understand, the industry needs to make them easier to engage with in the first place.” 

Eastwood added: “Employers play an important role, but providers also have a responsibility to make pensions easier to understand through the experience itself. 

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“That means helping people clearly see what they’re saving, what their employer is contributing and what that could mean at retirement. 

“When people can see that clearly, they’re far more likely to engage with their pension and take positive action.”

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