A staggering 13.6m Britons have never reviewed their pension plans while a further 2.2m have not done so in the past five years, according to Barings Asset Management.
Research also found UK citizens are taking less interest in their investments, despite increased market volatility, as just 22% have reviewed their pension asset allocation in the past twelve months, compared with 28% the previous year.
Of the 46% of people who have reviewed their pension plans, 41% could not remember or did not know whether they had chosen the default investment option.
Barings research also found 40% of people had simply chosen the default option and only 19% claim to have chosen the fund allocation themselves.
While 55% of people were clear on the asset allocation of the default option, 22% felt the explanation was not good, while a further 11% felt it was not explained at all, according to Barings.
Young people in particular are less likely to review their pension portfolios. Approximately 56% of 18-24 year olds have never reviewed their pension plans, compared with 25% of those in the 55-64 age group.
Research also found a considerable gender difference. Of the 46% who have reviewed their pension plans, 53% of women did not know or could not remember if they opted for the default fund compared to 29% of men.
Marino Valensise, chief investment officer at Barings, urges people to review the asset allocation of their pension portfolio on a regular basis to make sure it is in line with their age, lifestyle commitments and number of years to retirement, especially given the recent market volatility.
“These statistics are very worrying. It is surprising to see that so many people still have no idea where their money is being invested or, indeed, whether their pension is producing the returns necessary to support them in retirement."
“Coupled with the fact that people are not putting aside enough funds in general for their retirement, it’s clear that many people could face a serious shortfall when they reach retirement age.”
He recommends reviewing pension schemes on an annual basis and taking independent financial advice.
“Circumstances change and individuals need to amend their pension portfolio in line with these changes,” he says.IFAonline
Suspension remains 'in best interests of all investors'
Our weekly heads-up for advisers
'UK investment case remains strong'
'No viable alternative'