Table of Contents
Executive Summary
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- The market
- DC pension ownership is up, but retirement competes with other saving goals
- Advisers look to plug the advice gap
- The consumer
- One in three adults have a pension but inequalities remain
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- Figure 1: Pension and savings product ownership, July 2015
- Traditional retirement is waning
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- Figure 2: Expected plans for retirement, July 2015
- Just 41% are confident they will save enough for a comfortable retirement
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- Figure 3: Agreement with attitudes towards pensions, July 2015
- Employers and online research are the top sources of information …
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- Figure 4: Pension and retirement income information sources used, July 2015
- Online research is a threat to paid-for advice
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- Figure 5: Expected future pension and retirement income information sources, July 2015
- Half have been unaffected by pension freedoms
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- Figure 6: Impact of 2014 Budget pension changes on retirement plans, July 2015
- What we think
Issues and Insights
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- Is traditional retirement under threat?
- The facts
- The implications
- Goals-oriented planning could be key to early engagement
- The facts
- The implications
- Is online guidance a threat or opportunity for advisers?
- The facts
- The implications
The Market – What You Need to Know
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- DC pension ownership is growing, thanks to auto-enrolment …
- … but saving for retirement faces competition for spare funds
- The state pension age is rising as retirements get longer
- Legislative reforms have changed the landscape
- Advisers look to plug the advice gap
The Retirement Planning Environment
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- Auto-enrolment boosts DC pension ownership
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- Figure 7: Pension provisions of UK workers, by type of pension, 2005-14
- A third plan to focus on saving on retirement in the next five years
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- Figure 8: Motivation for saving (any rank), July 2015
- Longer retirements require better planning
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- Figure 9: Actual and projected life expectancies at 65, by gender, 1981-2062
- … and less state support
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- Figure 10: Projected dates for full transitions to increased state pension ages, by gender
- Reforms take effect
Recent Developments in Retirement Planning
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- Pension Wise expands after launch
- The advice gap will be served by the rise of online services …
- … and simplified advice
The Consumer – What You Need to Know
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- One in three adults have a pension but inequalities remain
- Traditional retirement is waning
- Just 41% are confident they will save enough for a comfortable retirement
- Pensions are still first choice
- Lack of engagement could be a barrier to greater saving
- Online research is a threat to paid-for advice
- Half have been unaffected by pension freedoms
Pension and Savings Product Ownership
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- A third of adults have a pension
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- Figure 11: Pension and savings product ownership, July 2015
- Pension ownership grows with age
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- Figure 12: Any pension ownership, by age, July 2015
- … while income is also a key factor
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- Figure 13: Any pension ownership, by gross annual household income, July 2015
- 18% of over-45s have no savings provisions
Retirement Expectations
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- A third plan to work beyond the state pension age
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- Figure 14: Expected plans for retirement, July 2015
- Phased retirement on the rise?
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- Figure 15: Expected retirement plans, by age, July 2015
- Lifestyle factors matter as much as financial pressures
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- Figure 16: Main reason for planning to work beyond state pension age, July 2015
Attitudes towards Pension Contributions
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- Will increased contributions come too late?
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- Figure 17: Attitudes towards pensions, July 2015
- Just 41% are confident of a comfortable retirement
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- Figure 18: Response to the statement “I am confident that I will have enough money saved for a comfortable retirement”, by age and gender, July 2015
- … but most are happy with employer contributions
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- Figure 19: Agreement with the statement “I am satisfied with the pension contributions offered by my employer”, by gross annual household income, July 2015
- Future concerns may affect plans more than people think
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- Figure 20: Response to the statement “I am confident that I will have enough money saved for a comfortable retirement”, by expected retirement plans, July 2015
Attitudes towards Retirement Planning
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- Pensions are still the go-to choice for retirement saving …
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- Figure 21: Attitudes towards pensions, July 2015
- … but people don’t rely on DC schemes as much as DB
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- Figure 22: Agreement with the statement “My pension is likely to be my main source of income in retirement”, by type of pension held, July 2015
- Uncertainty knocks confidence in long-term planning
Attitudes towards Pension Value
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- Only half regularly engage with their pension …
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- Figure 23: Attitudes towards pensions, July 2015
- … and lack of understanding of fees could be a barrier to saving
Retirement and Saving Advice
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- Employers and online research are the top sources of information …
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- Figure 24: Pension and retirement income information sources used, July 2015
- … but 29% are yet to seek any advice or guidance
- DC pension holders are the most likely to use an IFA
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- Figure 25: Expected future pension and retirement income information sources
- Pension Wise use will grow as it becomes more established
Impact of Pension Freedoms
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- Pension freedoms have had no effect on half of consumers’ plans
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- Figure 26: Impact of 2014 Budget pension changes on retirement plans, July 2015
- … while a quarter are more inclined to seek advice or guidance
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