Just four-in-10 (43%) working 50-65 year olds who expect to retire know how much annual income they’ll receive from their pension and savings, according to new research from Standard Life.
The YouGov survey, which questioned 1,935 people aged between 50-65 who expect to retire, also found that women are less likely to know about their post-work income than men (39% vs 46%).
The findings come despite the Financial Conduct Authority (FCA) introducing measures to help people make the most of their pension savings earlier this year, by refreshing the retirement ‘wake up packs’. The move followed the regulator’s conclusion that those approaching retirement, acting without guidance or advice, were struggling to make informed decisions.
Geographically, the results show significant geographic disparity with a third of Londoners (34%) knowing how much they’ll receive post retirement compared to a more than half of those in the East of England (52%).
Additionally, there is a notable drop in awareness amongst those who are divorced or separated (37%) and never married (34%) compared to those in married or in a civil partnership (46%).
Backing up the FCA’s estimate that 100,000 people enter drawdown ever year without taking financial advice1, the study also found that the majority (53%) consider themselves ‘knowledgeable’ about their retirement options. More men consider themselves knowledgeable (57%) than women (48%.) Across the UK, those in the East of England (60%) are the most confident in their knowledge of retirement options the UK, Yorkshire and Humber is the least (49%).
Laura Laidlaw, Head of Customer Communications at Standard Life said: “These findings are worrying, but in truth – they are not surprising. The fact is not enough people are taking advice in those crucial few years before retirement. The decisions made at retirement are big ones and have long term consequences.
“Many spend years accumulating a large amount of money in pensions and other savings, but really don’t know what that might mean, how much income they can reasonably expect to receive and how best to take that income.
“Understanding the savings you have, and the options you have with those savings is key. Taking advice can help to give you peace of mind that the choices you make when accessing your savings are right for you. And, during times of economic uncertainty the importance of seeking expert support with major financial decisions only increases.”
All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2003 working adults aged 50 – 65, of which 1935 expect to retire. Fieldwork was undertaken between 18th - 21st October 2019. The survey was carried out online.
1 - FCA proposes rules on investment pathways and other measures to improve retirement outcomes for consumers - https://www.fca.org.uk/news/press-releases/fca-proposes-rules-investment-pathways-and-other-measures-improve-retirement-outcomes-consumers
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