A lack of understanding around pensions continues to undermine retirement confidence among UK workers, with new research from financial wellbeing and retirement specialist WEALTH at work revealing growing gaps in knowledge.

The study of 2,000 UK workers with a defined contribution pension found that over a quarter (27%) of employees are unaware that their pension is invested in a range of funds including, for example, stocks and shares. This is a significant increase from 21% in 2025, suggesting that people’s understanding of how pensions work is declining.

The findings highlight that while many employees appear confident in their knowledge, there is a disconnect between perception and reality. Although four-fifths (80%) say they know how much they contribute to their pension and over three quarters (77%) say they understand employer contributions, almost a third (32%) do not feel confident they are saving enough for retirement.

There are also clear gaps in basic awareness, with one in ten employees (10%) saying they do not know how much is going into their pension at all, raising concerns about how effectively individuals can plan for retirement.

Jonathan Watts-Lay, Director, WEALTH at work, comments: “Whilst auto-enrolment has been successful in getting people to start saving, the research suggests an emerging ‘default and disengage’ mindset, where individuals blindly contribute without fully engaging with their pension as a long-term investment.

“There is a real risk of false confidence when it comes to pensions. Many people believe they understand their savings, but significant knowledge gaps remain, particularly around how pensions are invested and whether contributions are sufficient. This can pose significant risks, especially if investment performance deteriorates, particularly in the run-up to retirement. Without this insight and understanding, it is difficult for individuals to make informed decisions.

“The good news is there are some simple steps people can take – such as reviewing how their pension is invested and performing. This can help employees to consider whether they are saving enough for retirement and potentially increase contributions if they can afford to. Even small changes can make a huge difference over time.

“These findings highlight the need for employers to go beyond enrolment and provide ongoing financial education, helping employees to better understand, engage with and take greater ownership of their pension savings. It’s also important that, as retirement approaches, employees are supported with appropriate guidance and consider whether they would benefit from investment advice to help them understand their options and make informed decisions about how to access their savings. Partnering with trusted workplace providers can help ensure support is consistent, robust and effective. This in turn can lead to better retirement outcomes and support a more financially confident and resilient workforce.”