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Retirement Planning: Pre-retirement - UK - September 2015

OVERVIEW
Abbreviations
EXECUTIVE SUMMARY
The market
The consumer
Figure 1: Pension and savings product ownership, July 2015
Figure 2: Expected plans for retirement, July 2015
Figure 3: Agreement with attitudes towards pensions, July 2015
Figure 4: Pension and retirement income information sources used, July 2015
Figure 5: Expected future pension and retirement income information sources, July 2015
Figure 6: Impact of 2014 Budget pension changes on retirement plans, July 2015
What we think
ISSUES & INSIGHTS
Is traditional retirement under threat?
Goals-oriented planning could be key to early engagement
Is online guidance a threat or opportunity for advisers?
THE MARKET
What you need to know
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
Auto-enrolment boosts DC pension ownership
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
Figure 8: Motivation for saving (any rank), July 2015
Longer retirements require better planning
Figure 9: Actual and projected life expectancies at 65, by gender, 1981-2062
… and less state support
Figure 10: Projected dates for full transitions to increased state pension ages, by gender
Reforms take effect
Recent developments in retirement planning
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
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
A third of adults have a pension
Figure 11: Pension and savings product ownership, July 2015
Pension ownership grows with age
Figure 12: Any pension ownership, by age, July 2015
… while income is also a key factor
Figure 13: Any pension ownership, by gross annual household income, July 2015
18% of over-45s have no savings provisions
Retirement expectations
A third plan to work beyond the state pension age
Figure 14: Expected plans for retirement, July 2015
Phased retirement on the rise?
Figure 15: Expected retirement plans, by age, July 2015
Lifestyle factors matter as much as financial pressures
Figure 16: Main reason for planning to work beyond state pension age, July 2015
Attitudes towards pension contributions
Will increased contributions come too late?
Figure 17: Attitudes towards pensions, July 2015
Just 41% are confident of a comfortable retirement
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
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
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
Pensions are still the go-to choice for retirement saving …
Figure 21: Attitudes towards pensions, July 2015
… but people don’t rely on DC schemes as much as DB
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
Only half regularly engage with their pension …
Figure 23: Attitudes towards pensions, July 2015
… and lack of understanding of fees could be a barrier to saving
Retirement and saving advice
Employers and online research are the top sources of information …
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
Figure 25: Expected future pension and retirement income information sources
Pension Wise use will grow as it becomes more established
Impact of pension freedoms
Pension freedoms have had no effect on half of consumers’ plans
Figure 26: Impact of 2014 Budget pension changes on retirement plans, July 2015
… while a quarter are more inclined to seek advice or guidance
RESEARCH METHODOLOGY
UK Research Methodology
Sampling and weighting
Face to Face Surveys
Definitions
Brand & Social Media Research
Trade research
Desk research
Statistical Forecasting
The Mintel fan chart

Retirement Planning: Pre-retirement - UK - September 2015

“Online tools that provide projections of what pension funds may be worth based on current contributions by an expected retirement date will help savers to take a more goal-oriented approach to their retirement planning. Services like this could be the key to bringing retirement planning to the fore much earlier than is currently the case.”

- Rich Shepherd, Financial Services Research Analyst

This report covers the following areas:

Is traditional retirement under threat?
Goals-oriented planning could be key to early engagement
Is online guidance a threat or opportunity for advisers?


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