Just over a third (36%) of people know that their pension is being invested in the stock market, Hargreaves Lansdown (HL) has found.

In a survey of 1,200 people in April 2024, a third (34%) of respondents said that their pension wasn’t being invested in the stock market, with three in 10 (30%) saying they were unsure.

The research found that men (46%) were more likely to know their pension was invested, compared to a quarter (25%) of women.

Head of retirement analysis at HL, Helen Morrissey, said: "These findings are stark, but not altogether unexpected. We talk about saving into a pension rather than investing and so it’s highly likely people think their contributions are going into some kind of savings account rather than into the markets. However, it is a misconception we must address, because it gives us a real opportunity to drive engagement and people’s resilience along with it."

HL also said that the findings point to a "fundamental misunderstanding" about pensions and could be a reason why people do not engage.

Morrissey added: "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 SIPP with HL as an example offering over 14,000 investment options.

"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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