Topic: Retirement Outcomes

Pandemic has helped workers to save more – latest research

Nearly three in 10 people (29 per cent) have been able to save more money since the beginning of COVID-19, and latest research shows how the pandemic has impacted people differently depending on what jobs they have.


A YouGov survey, conducted on behalf of The People’s Pension1, shows that more than a third (37%) of those described as ABC1s, who tend to occupy managerial and supervisory positions, have been able to save more since March 2020, compared to 20% of C2DE workers, who are typically in manual and lower paid jobs2. The regions where the highest proportion of people said they were able to save more include; Yorkshire and the Humber (36%), East Midlands (35%), South East (35%) and Wales (33%). Whereas the regions least likely to have saved more are: North East (20%), Northern Ireland (22%), North West (23%) and South West (24%).


The poll also shows that 1 in 20 UK adults (5% ) have increased the amount they save into their pension since the beginning of the pandemic (March 2020) with 6% of ABC1s achieving this, compared to 3% C2DEs.


The survey of 2,163 adults , conducted as furlough came to an end, shows that since the pandemic began:
• 2% have been left out of work
• 9% say they have earned significantly less
• Two thirds of pension savers (67% haven’t felt the need to engage with their pension
• 3% withdrew money from their pensions

The survey follows recent figures from the Department for Work and Pensions3 that show that overall saving into UK workplace pensions in 2020 rose by £5.5bn to £105.9bn.


Phil Brown, director of policy and external affairs at B&CE, provider of The People’s Pension, said: “This research confirms that the economic fallout from the pandemic has impacted people differently, depending on how much they earn and where they live. It’s very interesting to see that nearly three in 10 adults (29%) have been able to save money due to the fact they have spent a lot less on holidays and going out.


“The results of our survey also reinforce the importance of saving into a pension, something that people have continued to do during a time of great economic uncertainty.”


ENDS

Retirement poll reveals desire for trusted guidance

Survey reveals that pension savers want trusted guidance to help them secure a good retirement

Three quarters (75 per cent) 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 YouGov1 survey was commissioned by leading workplace pension provider The People’s Pension2, following the publication of the ground-breaking New Choices Big Decisions3 report earlier this year, which, based on extensive interviews, found that many older savers are sleepwalking into retirement and run the risk of running out of pension savings years before they die. This study was first launched following the introduction of pension freedoms4, which has meant that individuals either must make a choice between a variety of financial products to finance their retirement or withdraw their pension savings.

The survey presented respondents with a selection of options for spending their pension savings during retirement. It found that nearly four in ten (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 a guaranteed regular income (an annuity) and the rest as a flexible income pot (drawdown) after taking the tax-free lump sum up-front. A further 35 per cent chose a guaranteed regular income (an annuity) only option after taking the tax-free lump sum.

The survey also highlighted how unprepared for retirement planning many people are:

  • More than a third (35 per cent) don’t know when they will retire. For those aged 55 and over, more than a fifth (22 per cent) are uncertain of when they will stop working.
  • Just over one in ten (12 per cent) knew or guessed the weekly value of the UK State Pension5. This knowledge is as low as three 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 don’t know how long their retirement savings will need to last them, including 45 per cent of those aged 55 and above.
  • Nearly three in ten (28 per cent) of everyone surveyed, say they have no idea what to do with the savings they have built up for their retirement. 

Phil Brown, the director of policy and external affairs at B&CE, the provider of The People’s Pension, said: “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.”

ENDS