The Financial Future Consumer Attitudes Towards Financial Planning and Themes for 2018
At Retirement Perhaps unsurprisingly, the survey shows an increase in awareness around pensions as respondents get closer to retirement age. As an example, 70% of 55-75 year olds had heard of an annuity compared to only 35% of 25-34 year olds. What is of greater concern is that when asked to identify seven common pension terms, including income drawdown and defined benefit, 30% claimed to have heard of none of the terms. 84% had never heard the term â€œ2015 pension freedomsâ€?, despite the campaigns around this huge change to how pensions can be accessed.
We believe that this could be due to longstanding attitudes towards retirement. Arguably, people are sticking to their long-term pension plans, choosing not to withdraw their pension funds to spend as they invested in a pension to provide an income in retirement and that remains their intention.
When it comes to pension freedoms, 70% of people havenâ€™t used the opportunity to take a lump sum pension payment and of those that have, only 16% have used it for its intended purpose, to fund early retirement.
You said that you have taken out some or all of your pension as a lump sum, what are you using the money for?
Which, if any, of these terms, which relate to pensions, have you heard of before today? 50%
Pass on Money
Pay off Mortgage
% of respondents
2015 pension freedoms
% of respondents
Money being used for
It is arguable that we are yet to see the effects of the implementation of the pension reforms of 2015.
The research shows that over 70% of people have not chosen to access their pension early, preferring to stick to their original plan and use their pension pot to fund their retirement.
Of the 30% that have chosen to access their funds, 56% of withdrawals were used to fund lifestyle expenses, such as a new car or a holiday, as opposed to funding their retirement.
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Consumer Attitudes Towards Financial Planning and Themes for 2018.