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Over 55s shun free government pensions guidance service

Despite admitting their savings for retirement will not be enough

Only one in five people (20%) aged over 55 will take up government guidance to help them in retirement, based on our recent study in partnership with OnePoll, which questioned 2,000 people over the age of 55 across the UK.

Despite the ability to access free guidance via the government’s Pension Wise Service, more than a third (37%) of people said they would conduct their own online and telephone research and 17% said they would seek advice from their families. 

The reluctance to embrace Pension Wise is at odds with how over 55s feel overall about the pension reforms. When asked if they support the changes allowing more freedom to take their pension as cash, nearly half (49%) agreed. But the readiness to embrace the reforms without seeking advice could leave many at risk particularly as one in three (34%) over 55s have acknowledged they will exhaust their savings during their retirement. 

Only 19% of over 55s are against the new pension legislation, with a third (32%) still undecided on whether the reforms will be beneficial for savers. Therefore our findings indicate that over 55s need more time and guidance in order to understand the new options for retirement income. Of those surveyed, nearly one in three (29%) said they didn’t know if they would either withdraw their pension or manage the money themselves, keep the money invested or buy an annuity.

Data collated by the University of Birmingham on behalf of Sanlam found a discrepancy in what consumers say and the actions they take when it comes to their retirement income; highlighting a need to design retirement solutions that allow both flexibility of income and taking a steady, regular income.  

This research revealed that consumers want regular, steady income more than they want flexibility of income.  Yet when it comes to their actual behaviour, those already in income drawdown take larger blocks of income, infrequently suggesting flexibility dominates. Dr Paul Cox, from the University of Birmingham, warned that about a third of consumers age 55+ with pensions either don’t know or can’t decide how they would prefer to consume their retirement savings or have yet to give  it any thought. 

The raft of changes that came into force on the 6th April means more people may need to seek professional advice  or government guidance to help make crucial long-term savings decisions.

If you would like to discuss your retirement options, please do not hesitate to get in touch. We'd love to hear from you. Email letstalk@sanlam.co.uk

* Research conducted amongst 2,000 UK residents aged over 55 by independent research agency, OnePoll. 

Date issued: 24.06.15

Please remember any views or facts expressed above are based on information received from a variety of sources which we believe to be reliable, but are not guaranteed as to accuracy or completeness. Any expressions of opinion are subject to change without notice. None of the information should be regarded as advice. Past performance is not a reliable indicator of future results. Investing involves risk and the value of investments and the income from them may fall as well as rise and is not guaranteed. Investors may not get back the original amount invested. Any tax treatment is dependant upon individual client circumstances and may be subject to change.

Sanlam is a trading name of Sanlam Wealth Planning UK Limited (Reg. in England 3879955) and English Mutual Limited (Reg. in England 6685913). English Mutual Limited is an appointed representative of Sanlam Wealth Planning UK Limited which is authorised and regulated by the Financial Conduct Authority.

Registered Office: St. Bartholomew’s House, Lewins Mead, Bristol, BS1 2NH.

Investing involves risk and the value of investments and the income from them may fall as well as rise and are not guaranteed. Investors may not get back the original amount invested.