Millions ignorant to risk on pensions and investments

The asset manager warns the situation is especially worrying for those approaching retirement with 3.5 million people (50%) of those aged 55-64 and 3.9 million people (40%) aged 65+ having never made a change.  

Only 3.2 million people have changed the risk profile of their pension and investments within the last six months. 

Some two million haven’t made a change for over ten years, while 1.5 million people aged 55 and over haven’t made a change for at least six years, a staggering number given the market volatility of recent years.

The research also reveals that 8.3 million people (17%) are ‘unaware’ of the level of risk involved with  investments, including pensions that they have, with a further 2.6 million people (6%) unable to say. 

1.7 million people who are 55 and over are unaware of the risks involved with their investments despite the significant role they play in providing for their desired lifestyle and financial position in retirement. 

On average, men (59%) understand the risks associated with investments more than women (39%).  

Marino Valensise, Chief Investment Officer at Barings, comments:

“We are staggered by the number of people who aren’t aware of the risks involved with their pensions and investments. With so few people taking an active role in understanding the terms and conditions of their investments, many are likely to be disappointed when they reach retirement. 

"Without understanding the risks they are ignorant to how they need to look after the pot in order to get the maximum income in retirement."

When looking on a regional basis, the research reveals that in Scotland and Wales 49% and 51% of respondents have never made a change to their pension and investments in order to alter their risk profile.

The South proved to be the most investment attentive of the British regions with 16% of those respondents having reviewed their pension or investment to alter their risk profile within the last year.

Marino continues:

“Quite simply, not enough people are checking the risk profile of their pension and investments and a large proportion of those that do, aren’t doing it regularly enough.  Market volatility and the impact this is having on our savings is front page news these days and can no longer be ignored. 

"The amount of risk someone takes with their pension and investments needs to reflect their life stage and be carefully and regularly monitored.”