Younger pension savers are emerging as the most engaged and informed group when it comes to understanding where their pension money is invested, according to new research from Pensions UK.

The organisation’s latest consumer research highlighted a widening generational divide in pension engagement, with younger adults more likely than older savers to understand and actively engage with their pension investments.

Among those aged 18 to 34, 31 per cent said they knew what their pension was invested in, compared with 21 per cent of savers aged 35 to 54.

Younger savers were also more likely to have changed their pension investment options, with 21 per cent reporting that they had done so compared with 12 per cent of middle-aged savers.

The research also found younger savers were more open to domestic investment, with 22 per cent saying they would prefer their pension to be invested in the UK even if returns were lower, compared with 13 per cent among older groups.

Across the wider population, however, support for UK investment remained largely dependent on returns.

The findings showed that 32 per cent of savers would prefer their pension to be invested in the UK if returns were comparable, while 16 per cent said they would prioritise UK investment even if it resulted in lower returns.

Despite increased political and media attention on pension investment over the past year, overall understanding of how pensions were invested remained limited.

Awareness that pensions were invested rose slightly to 77 per cent, up from 74 per cent last year.

However, only 24 per cent of savers said they knew where their money was invested, a modest increase from 20 per cent in 2025.

The research also suggested public support for government involvement in pension investment decisions may be weakening.

Indeed, support for the government encouraging pension schemes to invest in UK companies fell from 60 per cent last year to 50 per cent this year.

Meanwhile, 44 per cent of savers said the government should not tell pension providers where to invest their money, compared with 26 per cent who believed it should.

Confusion also remained around whether pension savings were currently invested in UK assets.

The research found that 61 per cent of savers did not know whether their pension included UK investments, while only 14 per cent said they were confident that it did.

Commenting on the findings, Pensions UK director of policy and advocacy, Zoe Alexander, noted that younger savers appeared "more confident" when it came to understanding and engaging with where their pension money was invested.

However, she warned that even among younger savers, there were "big knowledge gaps".

"That’s why it’s so important that while trying to improve financial understanding, we must make sure the system works well for savers who take no or little action.

“This year’s findings also reinforce a very clear message," Alexander continued.

"The public is open to the idea of greater UK investment, but only when it supports strong returns.

"Savers want the government to encourage pension schemes to invest in the UK where it makes sense for them, but they do not want the government telling schemes where to put their money.

“People want good outcomes, not political direction, and any policy push must keep savers’ interests at its heart.

“By working together, the government and the industry can create the right environment for pension schemes to deliver strong financial futures for their members, while also supporting long-term and sustainable growth for the UK economy.

"Savers need clarity, confidence and trust, and that means continuing to improve understanding alongside any wider investment reforms,” she added.

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