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One in 10 (10%) pension savers with a defined contribution (DC) workplace pot is planning to increase their contributions this year, a survey has found.
One in eight (12%) people with a DC pension aims to review their pension plan and retirement goals in 2025, rising to nearly a quarter (23%) of people over the age of 55, according to the research commissioned by the Pensions and Lifetime Savings Association (PLSA).
The PLSA suggested the findings could reflect a growing awareness of the need to build a robust retirement fund and perhaps that DC pension savers often need to be more active in making this happen for themselves compared with those with defined benefit (DB) pensions, which promise savers a salary-based retirement income.
With DC pensions, savers bear the risk of how much money they end up with in retirement, based on factors such as contributions and investment performance.
Those with defined contribution pensions are more likely to need to take positive action themselves to secure the retirement they expect
Zoe Alexander, Pensions and Lifetime Savings Association
Across the survey of more than 2,000 people, which also included non-DC pension savers, a quarter (25%) of people are planning to review and reduce their monthly spending this year.
More than a fifth (22%) plan to start saving for a specific goal, such as a house deposit, a holiday or education, according to the survey carried out by Yonder Consulting in December.
Nearly a fifth (19%) are aiming to pay off debt and 7% plan to open an Isa savings account.
One in 20 (5%) people questioned plans to start or increase contributions to a child’s savings or education fund.
Some 8% of people across the survey generally plan to review their pension plan and retirement goals in 2025, with those with a DC pension particularly likely to be doing this.
Zoe Alexander, director of policy and advocacy, PLSA, said: “The start of a new year is the perfect time to reset financial goals and, while everyday needs such as reducing spending or saving for short-term plans often take priority, it’s encouraging to see people across different age groups turning their attention to pensions.
Taking action early is key
Zoe Alexander, Pensions and Lifetime Savings Association
“Younger savers are focusing on building strong financial habits early, while those approaching retirement are prioritising reviewing their plans to ensure they’re on track.
“Those with defined contribution pensions are more likely to need to take positive action themselves to secure the retirement they expect, as saving at the default 8% may not get them there.
“Small changes – such as reviewing investment choices, increasing contributions by even a small amount or making sure they are taking advantage of employer matching contributions – can make a real difference over time. These pensions offer valuable opportunities to build a secure future, but taking action early is key.”
