The pensions industry and policy makers should be mindful of savers' preference for simple choices and low risk pensions when thinking about how to improve the UK’s approach to pensions, the Pensions and Lifetime Savings Association (PLSA) has said.

Research from the PLSA revealed a "nuanced landscape of awareness, preferences, and desires among savers", showing that while 82 per cent of savers know that their pension is invested, just 26 per cent know in what it is invested.

It also found that, "unsurprisingly”, many savers prefer their scheme to take the lead, with over half (58 per cent) preferring for their pension scheme to provide a provide a few easy and understandable options about where their money is invested, while 26 per cent were happy for their pension company to make all the decisions regarding their pension investments.

In contrast, just under a fifth (16 per cent) wanted full control over their investments.

This comes after previous research from the PLSA found that more than two thirds (69 per cent) of savers believe they lack, or are unsure they have, the skills needed to choose whether their pension scheme should invest.

The research also revealed savers’ preference for lower risk, as 69 per cent of savers had a risk-adverse attitude to their pension and prioritised protection of savings over the possibility of a higher return on their funds.

However, 44 per cent of pension savers said it is important for their pension provider to invest in a way which is protecting the environment, regardless of the return, while 53 per cent expressed that they would like some of their investment to be in UK companies.

Furthermore, 67 per cent of savers believe that the government should provide tax incentives to encourage pension schemes to invest in UK companies, increasing to 74 per cent for those aged over 55.

However, the research found that half (50 per cent) of savers believe that the government should not tell pension providers where to invest savers money, while 24 per cent were unsure, and 18 per cent agreed or strongly agreed that they should.

This is also in line with industry wants, as previous research from the PLSA found that the majority of UK pension schemes believe it is essential that they continue to be given complete freedom over investment decisions, provided they invest in line with members' interests.

Commenting on the latest findings, PLSA director of policy and advocacy, Nigel Peaple, said: “Our survey provides an interesting snapshot on current saver attitudes to pension investment.

“Now most people understand their pensions are invested but they don’t feel they have the skills to make investment choices. Instead, they want their scheme to provide a few simple choices.

“Policy makers and the pensions industry should bear this in mind as they think about how to improve the UK’s approach to pensions."

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