40% of people do not know where their SIPP is invested.
According to research from Barings in the summer of 2012, two out of every five adults in the United Kingdom have no idea where their pension funds are invested. Staggeringly, many of them don’t even remember where they invested them in the first place.
Despite the financial crisis having a dramatic effect on people’s long-term savings, Barings were shocked to discover 41 per cent had little or no idea of where their retirement funds were invested. If that were repeated across the country, it equates to around 8 million people.
The consumer poll found that 45 per cent of respondents had never reviewed their pension plans. And even worse, 12 per cent of those who took part in the survey had no idea if they’d ever looked at their investments or reviewed them since the pension was set up.
Of those adults who had not yet retired but who had reviewed their pensions, fewer than half of them had done so in the past 12 months.
4 years on, nothing has changed
Barings carried out a similar survey in July 2008, just before the start of the financial crisis. At that time, 15 per cent said they had no idea when they had last reviewed their pension. And 39 per cent admitted to never having done so. Which means that nothing has changed, despite the fact that we’re all much more concerned about our money!
It’s a shocking state of affairs. And that’s because for most people, their pension fund represents one of their largest assets. It could be worth tens or even hundreds of thousands of pounds.
SIPPs are at the higher end of the scale, but despite their ‘self-invested’ status, many are not reviewed as often as they should be. What’s more, a large percentage of SIPP money is invested in stockmarket funds, missing the point that self-investment provides the opportunity to take advantage of all sorts of investments.
What would you do with eighty grand?
Consider this. If someone handed you tens of thousands of pounds in cash and told you to invest it for the next twenty years for your benefit, chances are you’d spend quite a bit of time researching the best place to put it. And you’d be bound to check how it was doing as time passed. So why are pensions so different?
Pensions are just ‘tax wrappers’ around cash. And in the case of a SIPP, you control the cash. So don’t wait until 1 January – make a ‘New Year’s Resolution’ today.
Check out the cash in your pension. Do something worthwhile with it. And when you stop work, you’ll be very glad you did!