Employers and trustees are concerned by the high number of members of UK defined contribution pension schemes who put their money into default funds, compared with the few who make active investment choices.

A report covering 31 large DC plans across eight industry sectors, carried out by PensionDCisions, showed more than two-thirds of the employers surveyed would like to see a decrease in the proportion of their members who fall into the default investment category. The rest were indifferent to any change. The survey revealed that on average, 80 per cent of employees had opted for default funds. In spite of the aim to reduce the use of default funds, there is little evidence that current efforts to encourage more engagement are bearing fruit. Default rates were much the same whether employers were keen to reduce default rates or indifferent.