Impact of Pension Changes Wave 14

15 Dec 2017

5000 + VAT

The Impact of Pension Changes, December 2017 is the 14th in a series of Pension and Annuity Tracker reports which have been published regularly since summer 2014. This report assesses any changes since the previous wave of research was run and examines how the new rules governing pensions and annuities (introduced in the March 2014 Budget) may lead to significant changes in consumer behaviour as people near retirement.

In particular, it aims to measure consumers’ responses to the new rules, providing companies with significant insight into how people intend to act. It also considers whether those intentions are subsequently correlative with actions, in this new “competitive and dynamic retirement income market” (HM Treasury: Freedom and Choice in Pensions, March 2014).

For this wave, YouGov Reports commissioned a survey among YouGov’s online panel, going to 2,486 consumers aged 50+ who are not retired, i.e. people approaching retirement and who should have retirement issues in the forefront of their financial planning.

Table of Contents
  • Table of Figures
  • Introduction & Scope
    • Report coverage
      • Definitions
      • Research Waves
      • Methodology
      • Abbreviations
  • Report Overview
    • The influence of pension freedoms seems to be reaching a plateau
  • Report Summary
    • There are more DC pension holders…
      • Key facts
      • …Resulting in over 2 million DC pension holders likely to be affected by pension freedoms…
      • …and a new approach to pension access
      • The power of pension liberation appears to have peaked
      • The advice problem remains, calling for new approaches
      • Generating income becomes a rising priority as retirement approaches…
      • …so lump sum taking is constrained by a need for income and tax minimisation
      • The 50-59 age group is a potential problem
  • Background
    • Key findings
      • DC workplace pensions continue to rise in importance
      • No significant moves towards pension pot consolidation…
      • …because of the growing ownership of DC pensions
  • Current Impact of the Reforms: Withdrawals and Lump Sum Taking
    • Key findings
      • New rules have impact – but the impact shows little sign of increasing
      • The desire to take withdrawals shows little sign of increasing
      • Still only 3% of DC pension holders withdraw under the new rules
      • Slow upward trend on current withdrawals
      • Future withdrawal plans continue to rise
      • Cash-in-hand continues to be the main preference
      • New legislation enforces greater tax efficiency when making withdrawals
  • Current Impact of the New Rules: Getting and Taking Advice
    • Key findings
      • You can take a pension holder to advice, but you can’t make them pay for it
      • Robo-advice could be a partial answer to the problem
      • Other forms of automated online advice can also help
      • Pension holders furthest from retirement the most likely use these
  • Future Impact of the Reforms: New Approach to Pensions
    • Key findings
      • Over four-in-10 DC pension holders change their pension actions
      • Three main courses of action
      • Continued stability in preferences
      • Income remains the main priority
      • Tax and spending rise in importance as retirement approaches
      • New annuity products could attract up to four-in-10 pension holders
      • Holding a lump sum in cash declines in importance
      • Save and easy to access remains the main focus of cash withdrawals
  • Future Impact of the New Rules: Retirement Strategies and Outcomes
    • Key findings
      • The pension gap widens again but still remains within normal bounds
      • Pension withdrawals are limited by the outcome gap
      • Most pensions holders will blend retirement with work
  • Market Trends
    • Key findings
      • Aged 50+ but not retired – 13 million in the UK
      • 9.3 million pension holders aged 50+
  • Appendix
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