Retirement confidence remains alarmingly low among defined contribution (DC) scheme members in the US, UK and Ireland, State Street Global Advisors (SSgA) has found.

According to the firm's survey that questioned 2,000 scheme members, just 31% of US participants, 26% of UK participants and 17% of Ireland participants fell confident that they will have enough saved through their employer sponsored DC scheme to afford the lifestyle they want in retirement.

SSgA said that DC members saw themselves as savers rather than investors, and that employers must appeal to the needs of these savers to boost retirement readiness.

Nigel Aston, SSgA managing director and head of UK DC, said: "The latest DC survey highlights yet again that DC members principally view themselves as savers, not investors. Understanding this mindset is critical for providing the right kind of support to encourage increased contributions in workplace DC plans.

"We're seeing consistently high levels of discomfort around market volatility, so it is more important than ever to ensure that pension plans offer investments that address this concern. Default strategies that balance risk and return can help increase the effectiveness of long-term saving efforts."

The survey also revealed that investment knowledge remains critically low with only 22% of respondents rating themselves as "very or extremely" knowledgeable about financial matters such as savings and investments.

SSgA said this lack of financial expertise may explain why investors were unwilling to take on additional risk to achieve greater returns, as only 27% of US participants, 15% of UK participants and 10% of Ireland participants would take "somewhat high risk or high risk" investments to achieve better returns.

According to the survey, across all regions at least one in five plan participants seek help or advice on their employer-sponsored retirement plans from websites, advisers, online tools or their employer.

The bulk of respondents across the US, UK and Ireland find retirement planning information from websites, advisers and financial publications most useful, ahead of guidance from the Government and their employer, SSgA said.

First published 29.07.2014

monique_simpson@wilmington.co.uk