10 million UK pensions going completely unchecked - Aviva

The figures suggest more than ten million pots are currently being left largely unmonitored across the UK.

The Aviva-commissioned research showed 63 per cent of over-45s pay little or no attention to their pension.

Those who are further away from retirement are most likely to spend no time reviewing their pension, although a quarter of those retiring within the next two years still fail to dedicate any time towards doing this.

Clive Bolton, managing director of retirement solutions at Aviva UK Life, said: “An alarming proportion of the UK’S pensions pots are being left unmonitored, with many simply ignoring their pension statements and hoping for the best.”

Half of those surveyed said they do nothing about the routine information they receive about their pension – 12 per cent said they do not even read it.

One in five savers in Scotland said they do not read the pension information they receive, making this the most likely area in the survey for people not to read their pension updates.

Meanwhile, in a separate survey carried out by Dundee-based Alliance Trust Savings, 50 per cent of respondents revealed that they view their pensions as a supplementary income in retirement or as a tool to be used to pass wealth to family members.

The 400 ATS customers who responded to the survey were all over 55 and the firm said the results showed that the increase in customers eligible to draw benefits has not grown significantly since the new pension freedoms were introduced.

Sara Wilson, from Alliance Trust Savings, said: “We expected to see a far more considerable increase in clients taking advantage of being able to withdraw their SIPP in full. Clearly our investors appear to be taking a cautious approach to how they spend their pension savings.”

35 per cent of ATS clients opted to enter into drawdown before 5th April 2015 as they wanted to take the Capped Drawdown option and keep the £40,000 Annual Allowance. This highlights that ATS customers continue to see their SIPP as a long term source of income and not as money to be withdrawn and frittered away on luxuries, as some had predicted.

Nearly 50 per cent of the pensioners surveyed said that, following the changes to the death benefits, they now view their SIPP as a source of wealth to pass on to their families without incurring large tax charges.

One pensioner said: “I saw my SIPP as a source of supplementary income to my company pension. However, with the new rules I see my SIPP more as wealth to pass on to my family”.

Another customer surveyed commented that: “Change in inheritance treatment of pension means I’m now using the SIPP to pass on wealth rather than for supplementary income. ISAs are now the preferred choice for supplementary income”.

Out of the clients that have taken benefits since 5th April, 12 per cent have taken the UFPLS option that Alliance Trust Savings offers and 88% opted for Flexi-Access Drawdown.

The survey revealed that of the clients that have withdrawn funds the main reasons were: