Half of pension savers prefer UK investment

March 17, 2025

2 minutes read

More than half (53 per cent) of UK savers would prefer their pension money invested in the UK, according to consumer research from the Pensions and Lifetime Savings Association (PLSA).

When asked about investment preferences, 37 per cent said they would prefer UK investments if they generate comparable returns and a further 16 per cent would prioritise UK investments even if they provided lower returns.

Zoe Alexander, director of policy and advocacy at the PLSA, said: “It’s striking that UK investments are proving to be a preference for many savers.

16%

16 per cent of savers would prioritise UK investments even if they provided lower returns

“Pension schemes are already thinking hard about how to invest more in the UK in ways that will deliver strong returns.”

The research found many UK workers lack knowledge about their investments with a total of 74 per cent aware that pension schemes invest their money.

Only 23 per cent of DC savers and 25 per cent of defined benefit savers knew where their pensions were invested.

Despite the focus on domestic investments, 63 per cent of savers do not know whether their pensions are invested in UK businesses or infrastructure projects.

Only 13 per cent are certain that their pension includes UK investments, and 24 per cent believe it does but are unsure.

Meanwhile, just over a third (37 per cent) of DC savers believe they have the skills and knowledge to choose their pension investments, while a similar proportion (37 per cent) say they do not.

To address this, the PLSA said pension providers and the government must improve financial literacy to ensure savers understand their investment options.

Alexander said: “The government has a key role to play in creating the right conditions, helping to deliver the right UK growth assets for schemes to invest in, at the right price.

“And employers need to be encouraged to choose schemes for their employees that are delivering the best value overall, rather than just looking at the headline price, because the type of UK investments schemes they are looking at can be more expensive, albeit with the potential to deliver strong returns.”