The structure of the retirement planning market is constantly shifting. The personal pension was launched more than two decades ago, and since then there has been a steady stream of new legislation intended to widen its appeal. The savings gap remains, however, and for many people the pension is part of the problem. It is perceived as being overly complex and inflexible, while a succession of mis-selling scandals has seriously dented public confidence in the trustworthiness of pensions advisers.

It is not just the structure and a lack of trust that puts people off investing in pensions. The average UK consumer is notoriously risk-averse and wary of investing hard-earned money in any kind of equity-based product. Instead of a US-style culture of equity investment, Britons are famous for their love of property – for most, their home is their main investment and the development of the buy-to-let mortgage led to a boom in property investment.

This report examines the factors that have led many people to shun the traditional pension, as well as those factors that mean that saving for retirement – inside or outside a pension wrapper – is becoming increasingly important. The main pension alternatives are identified, and the size of these competing markets assessed. Consumer research examines the range of long-term investments that people hold alongside their pension, as well as broader attitudes towards retirement savings.

Key issues

The impact of growing life expectancy and the associated increase in the cost of providing an income in retirement.

Consumer reaction to the slowdown, and falls in both property and equity values.

The growth of property as an alternative to traditional investment vehicles, and the impact of the credit crunch on the availability of property finance.

How non-pension investments fit into consumers’ broader portfolio of assets.

Lifestyle expectations in retirement, and the growth of phased retirement.