Just over a third (36 per cent) of savers know that their pension is invested in the stock market, research from Hargreaves Lansdown has revealed.

The survey found that more than a third (34 per cent) of people thought their pension was not invested, while a further 30 per cent were unsure.

Men were more likely than women to know that their pension was invested, with almost half (46 per cent) of male participants saying yes compared to just 25 per cent of women.

Hargreaves Lansdown said the findings pointed to a "fundamental misunderstanding" about pensions and could be one of the reasons people do not engage with their pension.

However, Hargreaves Lansdown head of retirement analysis, Helen Morrissey, said that although these findings are “stark”, they are not altogether unexpected, given that the conversation around pensions is focused on saving into them rather than investing.

Indeed, Morrissey suggested it is “highly likely” people think that their contributions are going into a savings account rather than into the market, arguing however, that this misconception must be addressed to give a “real opportunity” to drive engagement and people’s resilience.

She continued: “Added to this is people’s ability to choose where their pension is invested.

"Many people remain within the default fund offered by their provider, and this will offer people access to an investment that is well diversified across geographies and asset classes to help them build their pension.

“For those who wish to invest in a certain way, they can also make this happen through their pension or self-invested personal pension (SIPP).

"Helping people to understand that they are investors through their pensions can prove to be a powerful engagement tool.

“If people can see their money growing over time, it can make them more likely to boost their contributions and check in on their pension’s progress.

“It can also make them more likely to explore other investment options such as stocks and shares ISAs and really help them build their financial resilience overall.”

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