When it comes to your finances, neither inertia nor acting in haste is recommended. In fact, making informed, strategic, confident decisions about your wealth has arguably never been more important. Of course, consulting your financial planner is a great source of support and guidance, and while you certainly don’t need to know everything about pensions, it does pay to tune in now, even with years to run until retirement. Whether you’re still building your pension strategy in your 30s and early 40s or entering your peak earning years in your late 40s and early 50s, tuning in now can help make smarter, better-informed decisions.
Research1 has shone a light on the extent of knowledge gaps among UK adults…
Knowledge gaps revealed
While 53% of people believe they are knowledgeable about pensions, only 35% can correctly identify a defined benefit scheme and 34% understand what a defined contribution scheme is. Additionally, 20% are unaware of their own pension type and 57% do not realise that the government contributes to pensions through tax relief.
While over half (55%) are unaware how their pension is invested, 81% of respondents haven’t altered their investment strategy, with a quarter citing it’s because they don’t know enough or didn’t realise they could.
Almost 70% of people in the UK have between one and five pension pots, while 20% are unaware how many they actually have. Nearly a third (35%) of those who know where their pensions are, don’t know how to access them. While only 15% have consolidated their pensions, 46% are interested in doing so but are unsure what steps to take to achieve it.
How career paths define your pension pot
Research2 shows career progression significantly affects pension outcomes. Someone earning £25,000 at 22, with steady 3.5% annual pay rises, could retire at 68 with a £210,000 pension pot, while salary growth of 5% could boost this to £290,000. However, retiring as early as 58, for example, could reduce that pot to £176,000. While rapid career growth helps, burnout or early retirement can limit gains. Therefore, balancing ambitious career choices with wellbeing is critical.
And the State Pension?
Half of UK adults don’t know how much they’ll receive from their State Pension and 32% are unaware of the age they’ll qualify3. Over half (51%) don’t know how much the full new State Pension is – it’s currently £11,973 a year – while 52% don’t know how to find out their entitlement and 34% are unaware that National Insurance contributions determine the amount they’ll receive.
Time to focus on your pension?
With your pension such a major part of your retirement strategy, you really can’t afford not to be on the ball. Knowledge is crucial.
You may have some unanswered questions, and if you do, don’t hold back. Your financial planner can fill the gaps.
- Are you saving enough to retire when you’d like to?
- Do you know what income your pension might provide – and will it be enough?
- Are your pension investments aligned with your long-term goals and appetite for risk?
- Do you have old pension pots that could be consolidated?
- What type of pension(s) do you have?
- Is your current pension plan making the most of tax benefits?
If you’re feeling a little lost and think a catch-up would be helpful, your financial planner is here to support you. Let’s get your pension the airtime it deserves – so you can move forward with clarity and confidence.
1Aviva, 2025, 2&3Standard Life, 2025
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.
Half of UK adults unsure how much they’ll receive in their state pension | Standard Life
Locked in to corporate life | Standard Life
How much is the state pension? – Which?
Aviva study reveals critical knowledge gap about UK pensions – Aviva plc
Retirees could deplete pension pots due to ‘lottery effect’, L&G states – Money Age
Ten years of pensions freedoms: Lamborghini or safety net – what choices have pension savers made? – Royal LondonFocus on career progression could have ‘significant’ impact on pension outcomes – Pensions Age Magazine