More than two-thirds (69%) of employees do not want to choose their workplace pension provider and would rather their employer make the choice, according to new research from the Pensions and Lifetime Savings Association (PLSA).
Following the government’s announcement of a lifetime provider model for workplace pensions, where employees can choose one provider for their whole career, the association surveyed 1,631 non-retired adults, of which 568 were in employment saving for a defined contribution (DC) workplace pension.
It found that 31% of respondents would opt to choose their workplace pension provider themselves. Three-quarters (75%) of women compared to 63% of men want their employer to choose, while 66% of those aged 18-54 and 85% of those aged 55 and above shared the same sentiment.
Half (55%) would be either not at all or only slightly confident in selecting a pension provider, with 19% extremely or quite confident in their ability to make such decisions. One-quarter of men displayed higher confidence levels compared to 10% of women.
Just under two-fifths (37%) believe they possess the necessary skills and knowledge to choose the right provider, while 31% said they did not. Almost half (48%) of men claimed proficiency, compared to 24% of women, and 44% of those in the 18-24 age group were more likely to express confidence compared to 27% of those aged 55 and over.
Joe Dabrowski, deputy director – policy at the PLSA, said: “While the sector examines the concept of a lifetime provider, it is important that we carefully consider the implications the model may have on good saver outcomes, especially given long-established concerns about general financial literacy, as well as the average savers engagement and understanding of pensions.
“This will be important for the majority of employees who do not want to choose their own provider and those who lack confidence in making their own choice. Equally we must protect those who may have confidence, but in most cases will not in fact have the appropriate skills or knowledge to make good choices.”