Half of UK consumers find pensions information overwhelming as cost of living hits confidence

id

• Two in five (41%) have no idea what to do next with the pensions information they have
• Consumers have found information from the likes of financial advisers and pension providers more useful as they navigate the economic climate
• Standard Life’s insights demonstrate the type of information that consumers want to receive
• Those who haven’t made a plan are much less comfortable with finances than planners but blockers to getting support remain

Half (50%) of UK consumers think information around pensions and retirement is overwhelming, and more than two in five (41%) admit they have no idea what to do next after receiving it, according to new research¹ published by Standard Life, part of Phoenix Group, which highlights growing demand for more effective saving communications and information on financial planning.

Consumers seeking financial guidance as cost of living crisis hits consumer confidence

Standard Life’s Retirement Voice study found that over the past 12 months households have been hit by high inflation, rising interest rates and unsettled markets. This has taken its toll on consumer confidence and self-belief, with only 59% feeling confident making financial decisions now, down from 63% in 2022. Likely in response to this, more people are viewing third party support as useful – over four-fifths (83%) now think financial advisers are a useful source of support, rising from 73% last year. Similarly, 76% say speaking with their pension provider or information on their pension provider’s website has been helpful (increasing from 70% and 71% respectively), while 72% say the same about pension provider literature (up from 65%) and 69% think this about their employer (up from 62%).

In-demand topics and information sources

When it comes to the topics that people want information on to help their financial decision making, most demand is for knowing:

• How much money their pension will give them in retirement (47%)
• How much money is in their pension pot (46%)
• How to make sure they’re paying enough into their pension (32%)

When looking for guidance on pensions and retirement planning, people are most likely to turn to their pension provider’s website, with two in five (41%) saying they look at this at least once a year, followed by friends and family (39%) and internet guidance sites (39%). Those with a workplace pension are most likely to seek guidance from their employer (33%) and work colleagues (29%).

Advice benefits and blockers

There’s strong evidence that taking control of your finances, with or without the support of a third party, pays off – indeed, the research found 93% of planners on lower incomes (less than £20k) would say they’re enjoying their retirement, compared to 66% of non-planners on lower incomes. However, 72% of all respondents said they are doing little, if anything, to plan for their retirement. Clearly, more needs to be done to ensure people feel able to get the support they need to manage their long-term savings.

Jenny Holt, Managing Director for Customer Savings and Investments at Standard Life commented: “People are looking to trusted professionals for help in uncertain times and this has once again highlighted the value of having access to advice when making financial decisions, but it’s also thrown a spotlight on the current advice and guidance gap in the UK. The benefits of planning for the future and getting the right support at the right time is clear, but currently financial advice can seem inaccessible, and the existing system doesn’t allow providers to give personalised guidance that considers individual wants and needs. The Financial Conduct Authority has opened a consultation into broadening access to financial advice, which is welcome, and we’d like to work with the government, regulator and our industry peers to create an environment where consistent, high quality and accessible guidance and advice can be provided.

“At the same time, we need to find new ways to get more people to actively engage with their pension savings and planning for the future. Making it easy for people to understand what they have, what it’s worth and what it might provide in retirement will be key to helping people make better financial decisions. It also needs to be easy for people to access the information and support that they need. For example, communications from employers around retirement savings that are regular, targeted and relevant is a great way to boost engagement and supporting employees with wider financial wellbeing can have a positive knock-on effect on preparedness for retirement.”

-Ends-

Media enquiries

Notes to editors:

¹ - Boxclever conducted research among 6,000 UK adults. Fieldwork was conducted 6th Sept – 16th October 2022. Data was weighted post-fieldwork to ensure the data remained nationally representative on key demographics.

Comparisons to data from last year are taken from Boxclever research among 4,896 UK adults conducted between 16th and 23rd July 2021.

About Standard Life

• Standard Life is a brand that has been trusted to look after peoples' life savings for nearly 200 years
• Today it proudly serves millions of customers who come to Standard Life directly, through advisers and through their employers' pension scheme.
• Standard Life is part of Phoenix Group, the largest long-term savings and retirement business in the UK. We're proud to be building on nearly 200 years of Standard Life heritage together
• Our products include a variety of Pensions, Bonds and Retirement options to suit people's needs, helping our customers to invest and save for their future. We're proud to offer a leading range of sustainable and responsible investment options.
• We support our customers on their journey to and through retirement with comprehensive, easy-to-understand guidance so they can invest in the right way for their needs, and plan a future they feel confident about
• The value of investments can go down as well as up and may be worth less than originally invested.