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Industry Insights
June 12, 2024

Many workers nearing retirement don’t know how they will access their pension

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Wealth of Advice
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Almost half (49 per cent) of working people approaching retirement, aged between 50 and 59, don’t know how they will access their pension savings, research from TPT Retirement Solutions has found.

The survey found that just under a quarter (23 per cent) of those approaching retirement said they would draw their pension down over time, while one in six (16 per cent) said they would take it as a lump sum, and 6 per cent plan to buy an annuity.

Since pension freedoms came into force in 2015, defined contribution (DC) pension savers over 55 years old have been able to choose how to use their savings.

However, TPT Retirement Solutions said that its survey showed that those approaching retirement were more confident and engaged than other demographics as 30 per cent of all pension savers confessed that they don’t know how to make retirement decisions and worry about how to access their pension savings.

The most common response to the survey was uncertainty, even for those claiming to be confident in making retirement decisions.

Despite the uncertainty, 8 per cent of savers said they use a financial adviser for help with their pension, while 6 per cent have used Pension Wise.

Respondents also raised concern about their level of saving, with 37 per cent of those approaching retirement lacking confidence in their savings lasting for the duration of their retirement.

TPT Retirement Solutions’ DC director, Philip Smith, said that the lack of confidence and knowledge expressed by savers, particularly those approaching retirement age, is “worrying”.

“Similarly, the reluctance to pay for professional advice may result in high levels of anxiety and a lack of preparedness as savers approach retirement,” he added.

• If you are close to retirement and need help to understand your options, Wealth of Advice can help. We offer impartial advice, always tailored to the individual client’s needs and circumstances. For a free copy of our guide Understanding Your Retirement Options, visit https://www.wealthofadvice.co.uk/financial-guides    Alternatively, contact us for a free, no-obligation consultation. Tel. 0191 384 1008 or email enquiries@wealthofadvice.co.uk

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Matthew Sinclair (left) and Chris Breward (right), Chartered Financial Planners at Wealth of Advice