Retirement confidence remains alarmingly low among DC plan participants polled in the United States, the United Kingdom and Ireland.
A survey from State Street Global Advisors (SSgA) indicates that just 31 % of U.S. participants, 26% of U.K. participants and 17% of Ireland participants feel confident that they will have enough saved through their employer-sponsored DC plan to afford the lifestyle they want in retirement.
“The latest DC survey highlights yet again that DC members principally view themselves as savers, not investors,” says Nigel Aston, managing director and the head of U.K. DC at SSgA. “Understanding this mindset is critical for providing the right kind of support to encourage increased contributions in workplace DC plans.”
Default strategies that balance risk and return can help increase the effectiveness of long-term saving efforts, he adds.
The results also highlighted that investment knowledge remains critically low, with only 22% of respondents, on average, rating themselves as “very or extremely” knowledgeable about financial matters such as savings and investments.
This lack of financial expertise may explain why investors were unwilling to take on additional risk to achieve greater returns, as only 27% of U.S. participants, 15% of U.K. participants and 10% of Ireland participants would take “somewhat high risk or high risk” investments in order to achieve better returns.
Across all regions at least one in five plan participants seeks help or advice on their employer-sponsored retirement plans from websites, advisors, online tools or their employer.
The bulk of respondents find retirement planning information from websites, advisors and financial publications most useful, ahead of guidance from the government and their employer.
More than 2,000 DC plan participants ages 22 to 65 took part in the transatlantic survey.
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