Pension savers report feelings of anxiety and a sense of being overwhelmed when it comes to the complexities of how best to access their retirement savings. This was one of the key findings of a major new report from the Standard Life Centre for the Future of Retirement, which also found participants overwhelmingly back the concept of Targeted Support to make sense of their options.
With the regulator actively consulting on the design of Targeted Support and planning to allow the service to be launched early 2026, the work from the think tank seeks to move the conversation forward on both the needs the service can address and the practical challenges involved in delivering it.
The study, which has been running since last September involved a consumer panel of 30 UK adults aged over 45. The process started with an evidence review and interviews with stakeholders holding different views across the pensions industry, including consumer bodies. It culminated in group discussions with the panel earlier this year exploring the issues and bringing the voice of users to the fore.
What mattered most to the panel – key findings:
• Targeted Support was viewed as a means to aid decision making, filter options and reduce exposure to irrelevant options, although many cited avoiding poor decisions as a potential benefit too.
• Panellists viewed Targeted Support as providing an emotional benefit as much as a practical one. Discussions consistently highlighted feelings of anxiety about the complexity of accessing savings. Separate research from Standard Life, found that among Gen X, those aged 45 to 60, 41% reported feeling nervous about the choices ahead.
• Participants, who had time to understand Targeted Support, recognised that the service wouldn’t provide fully personalised recommendations but segment based suggestions and understood that they would retain responsibility for their decisions.
• Those with larger pension pots and more complex financial affairs were less enthusiastic than others and some highlighted that the service would likely be a stepping stone to a further conversation with a financial adviser.
Cath Sermon, Head of Public Engagement and Campaigns at Standard Life’s Centre for the Future of Retirement, said: “Too many savers feel overwhelmed when trying to make decisions around their pensions. Our study shows that even people with a good grasp of other financial areas of their lives, such as mortgages or ISAs, often feel confused about pensions. This can lead people to feel anxious, overwhelmed and worried about the risks of making uninformed decisions. What we’ve found is that people really like the idea of Targeted Support helping them whittle down their options.”
Challenges and design requirements identified by panellists
While the work identified overwhelming backing for Targeted Support, a number of issues will need to be addressed if the service is to deliver for users.
These include:
• The fact participants often have multiple pensions and were concerned about the potential for contradictory information from different providers. Ensuring Targeted Support providers work together to minimise variation in practices as approaches develop is key to addressing this. A requirement for sharing of industry best practice and regular review from the regulator was identified as a potential solution.
• Panellists expressed a lack of trust in the industry to always act in consumers’ best interests. To varying degrees, they also had a lack of trust around the government and wider economic climate, regulators and many said that they don’t even trust themselves and their own financial capabilities when it comes to making pension related decisions.
• This scepticism means panellists question whether they can trust providers to make suggestions that prioritise customers’ interests, not just providers’ interests. They were most receptive to Targeted Support when they see it as giving them relevant information and choice, or protecting them from harm, rather than selling anything.
• Discussions emphasised that online tools would not be enough to provide reassurance and clarity around potential courses of action, and people would like the option to speak to someone, even if just as back-up.
• Panellists were willing to share more data with providers if it would lead to more specific segments. Enabling providers to access pension dashboard data with customer consent would help with this challenge.
Cath Sermon continued: “With only 8% of the population receiving financial advice, there’s a clear need for something more accessible which consumers see Targeted Support as being able to help with. Some also said it would spur them on to approach a financial adviser and give them the confidence to do so. As we enter the next phase of consultation, consumers highlight two key clear challenges, which need to be addressed in the design and delivery of Targeted Support. They are sceptical that providers will always act in their best interests, and consistency really matters to them, with concerns about potential variability in the suggestions they receive having the potential to leave them more confused. These are important issues to address.”
Additional background
The sense of information overload that came through in the panel discussions is a theme backed up by Standard Life’s Retirement Voice study among 6,000 people. Last year’s report found that 40% of Gen X and 31% of Baby Boomers say there are too many options available when it comes to accessing their retirement finances.
The potential for poor and potentially irreversible decisions was also identified by the report. Almost a fifth (18%) of Gen X and more than one in 10 (12%) Baby Boomers are worried they’re making bad decisions around using their funds, while 43% and 30% respectively confess they feel guilty if they spend a large proportion of their pension pot.
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