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Retirement Planning: Pre-retirement - UK - September 2015

Published By :

Mintel

Published Date : Sep 2015

Category :

Banking

No. of Pages : N/A

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.

Table of Content

Introduction

Abbreviations

Executive Summary

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
Figure 1: Pension and savings product ownership, July 2015
Traditional retirement is waning
Figure 2: Expected plans for retirement, July 2015
Just 41% are confident they will save enough for a comfortable retirement
Figure 3: Agreement with attitudes towards pensions, July 2015
Employers and online research are the top sources of information …
Figure 4: Pension and retirement income information sources used, July 2015
Online research is a threat to paid-for advice
Figure 5: Expected future pension and retirement income information sources, July 2015
Half have been unaffected by pension freedoms
Figure 6: Impact of 2014 Budget pension changes on retirement plans, July 2015
What we think

Issues and Insights

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

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

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