Three quarters of UK adults who have a pension say that they would consider taking guidance about how to make their savings last throughout retirement from a pension provider with a legal duty to put their interests first, a new survey has revealed.
The survey presented respondents with a selection of options for spending their pension savings during retirement. It found that 37 per cent of those who are saving for retirement would be prepared to be guided towards taking a pension that was split between giving them an annuity and a flexible income drawdown pot after taking the tax-free lump sum up-front. A further 35 per cent chose an annuity-only option after taking the tax-free lump sum.
The survey also highlighted how unprepared for retirement planning many people are, with 35 per cent across all ages not knowing when they will retire, and 22 per cent of those aged 55 uncertain.
The research found 12 per cent knew or guessed the weekly value of the UK State Pension . This knowledge is as low as 3 per cent for 18-24-year olds and is only as high as 25 per cent for those aged 55 and over.
Just under half – 48 per cent- said they do not know how long their retirement savings will need to last them, including 45 per cent of those aged 55 and above, while 28 per cent of everyone surveyed said they have no idea what to do with the savings they have built up for their retirement.
Phil Brown, director of policy and external affairs at B&CE, the provider of The People’s Pension, says: “This latest research provides further evidence that pension savers are crying out for guidance about how they should approach retirement. It’s clear there is an opportunity for the industry and master trusts are well placed to meet it.
“Master trusts have an opportunity to develop the retirement products which will meet the needs of many for security as well as providing flexibility. This means a coming of age for well-governed auto enrolment schemes – as they move from being saving vehicles for employees to also providing their pensions in retirement.”
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