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Employees know less about pensions than they claim, study finds

Younger employees (age 25 to 34) have a better understanding of their pensions compared to the wider British workforce

UK workers know less about their pensions than they claim, research published on Monday (21 April) shows.

Half (53%) of employees reported knowing what they need to know about their pension, but only a fifth (20%) knew what type of pension they have, according to research commissioned by insurance company Aviva. 

Around a third (35%) of respondents could correctly identify what a defined benefit scheme was, and slightly less (34%) could explain the characteristics of a defined contribution (34%) scheme. 

Employers should not confuse pension participation with engagement, emphasised Doug Brown,
CEO of insurance, wealth and retirement at Aviva. 

Brown told HR magazine: “Since the introduction of automatic [pension] enrolment in 2012, every employer must now give their employees access to a workplace pension. This has taken pension participation to a record high. But participation should not be confused with engagement. Many employees may not fully appreciate the significance of this benefit. To boost engagement, employers can inform new employees of their pension entitlement at recruitment, and remind all employees of its value during their employment.

“Employers can also play an important role in supporting their employees’ financial education. The annual pension statement is a great opportunity to remind employees how much they have saved and how much they could have by the time they retire. Engaged and educated employees are more likely to feel empowered to make their own decisions and play an active role in their retirement planning.”


Read more: Three quarters of workers want responsible pensions


One reason for a lack of pensions knowledge could be poor awareness of what is available, suggested Matt Russell, CEO of benefits technology platform, Zest. 

He told HR magazine: “As well as boosting engagement in benefits, employers need to ensure that they are improving understanding of pensions, and supporting colleagues to step up savings, for example via financial literacy workshops or personalised money coaching. There is often a wealth of support available; employees are just unaware that it exists.”

Employees aged 25 to 34 had better understanding of their pensions, compared to the wider British workforce, Aviva's researchers found. But financial education should be for everyone, Russell emphasised.

He said: “Technology can be a fantastic way to foster greater engagement via targeted communications with employees of all ages, whether it be someone approaching retirement, or a younger employee who has just entered the workforce.”

Research findings from Aviva also showed that more men (64%) than women (43%) knew about their pension. Nearly half (47%) of men and 45% of women could correctly describe what a workplace pension is.

Employers should tailor pension and financial support to reflect the entire workforce's needs, according to Richard Sweetman, senior consultant at employee benefits consultancy Broadstone. 

Speaking to HR magazine, he said: “At a time when economic uncertainty is intensifying, helping employees make sense of their long-term finances is more important than ever.

“It’s also vital that support is tailored to reflect the diverse needs across the workforce. Information and education need to be timely: a 25-year-old saving for a first home will have very different financial goals and pressures than someone going on maternity leave or a 55-year-old approaching retirement. By segmenting content and delivery whether through benefit platforms, digital tools, in-person sessions, or personalised guidance employers can deliver support using media that is aligned to employees’ learning styles to make pensions feel more relevant and meaningful to each employee’s stage of life.”


Read more: Reports to pension regulator increase


Lily Megson, policy director at financial advisor My Pension Expert emphasised the importance of creating a space where employees can ask questions. 

Megson told HR magazine: “People also need to feel confident asking questions. Creating space for conversations – whether through a Q&A with a provider or giving managers confidence to point people towards the right support – makes pensions feel less intimidating.

“Of course, financial literacy doesn’t happen overnight. People are more likely to engage when the support they receive feels timely and relevant. That means linking guidance to real-life moments, like starting a new job, taking parental leave, or preparing for retirement – rather than relying on one-size-fits-all updates. When financial information is rooted in people’s everyday experiences, it becomes more accessible, and more likely to lead to action.”

Megson also highlighted the importance of looking beyond age when providing information around pensions and finances.

She said: “True inclusivity means looking beyond age. Not everyone owns a home, has children, or follows a traditional career path, so the language, tone, and examples used need to reflect the full diversity of the workforce. 

“Offering content in different formats, providing translations where needed, and making information easy to access – not buried in a portal – can go a long way in helping every employee feel seen, supported, and empowered to take control of their finances.”

Aviva commissioned Censuswide to survey 2,002 UK employees between 31 March and 4 April 2025.