Confusion ‘rife’ around retirement choices
5 January 2021
Uncertainty around retirement choices remains rife among those nearing retirement, new research from Just Group has shown.
Three in five (59%) 45-54 year olds said they were confused by their choices, with this figure rising to as much as 65% among women, according to the retirement specialist. Furthermore, only just over one in 10 (12%) of women are aware of the independent guidance on offer from Pension Wise, compared to 20% of men.
The research also found that just over a quarter (28%) of those aged between 45 and 54 knew what they planned to do with their retirement savings.
Just Group has called for greater industry support for those approaching retirement in understanding the options available to them and how to get best value from their pension benefits.
Stephen Lowe, group communications director, Just Group, said: “When the evidence shows that most people find their pension options confusing and are unsure what they will do with their savings, it seems common sense that the FCA and the Pensions Regulator should prioritise significantly increasing take up of a free service that is proven to help people understand their pension choices as well as avoiding scams and paying too much income tax.
“The Pension Wise evaluation from the Money and Pensions Service tells us that these guidance sessions leave the vast majority of users better informed and more confident in their decision-making. However, the opt-in ‘nudge’ to encourage people to take up this guidance means these sessions will still only reach a minority of people approaching the age when they become eligible to access their pension benefits.”
Figures released by the FCA earlier this year showed that only 14% of people receive impartial guidance before accessing their pensions, despite the DWP recently making clear that they want guidance to become a ‘normal part’ of the process.
“To make good on this promise, the FCA and the Pensions Regulator must have some tactics up their sleeve to transform usage to an accepted norm. Perhaps now will be a good time to trial automatic appointment booking into the Pension Wise guidance service,” Lowe added.
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