Pension freedoms: no more normal, it’s pioneer territory | PLSA
Pension freedoms: no more normal, it’s pioneer territory

Pension freedoms: no more normal, it’s pioneer territory

28 January 2016

The Pensions and Lifetime Savings Association today published Pension Freedoms: no more normal, the third report in its Understanding Retirement research series. It is the first major market-wide survey of who did what and why in the first six months of the pension freedoms, and was conducted using research to map the decision-making process for over four million individuals aged 55-70.

Of these four million people 2.8 million have at least one defined contribution (DC) pot not yet in payment; 1.8 million have at least one defined benefit (DB) pot not yet in payment; and, 0.5 million have both DB and DC pots not yet in payment. The research focused on the 2.8 million with at least one DC pot not yet in payment – the first cohort, or pioneers, of the pension freedoms.

Our research among this first cohort identified three clear groups of people:

  • Actioners – early adopters, a distinct and affluent group, many with experience of self-invested personal pensions (SIPPs) or income drawdown
  • Investigators – assessing their options, the largest group, limited experience of drawdown, limited DC savings but largely reliant on DC and other savings for an income in retirement
  • Inactives – the most vulnerable group, many still working, this group is the most reliant on their DC savings to provide an income in retirement but have the lowest levels of financial confidence

The findings clearly warn against placing too much weight on the experiences of the actioners as it’s clear they are by no means representative of the 2.8 million with at least one DC pot not yet in payment, nor of the longer term challenging trends that could emerge. It is the inactives that speak most clearly of the longer term challenges created by low levels of retirement savings married with the lowest levels of financial confidence.

Joanne Segars, Chief Executive, Pensions and Lifetime Savings Association, said:

“The message that comes through loud and clear from our research is that there’s no more normal when it comes to deciding what to do with savings at retirement. Pension freedoms have destroyed the traditional norms leaving a blank canvas for millions of people. This first cohort of savers are effectively pension pioneers – working out how to make the right decision with their savings but at the same time naturally fearful of making a poor decision in uncharted territory.

“Our earlier research identified the deadlock that’s been created by uncertain consumer demand and an unstable regulatory environment that raises questions about future liability – these have combined to freeze any development in services to help savers make use of the pension freedoms confidently or fully.

“Someone has to map the new pension freedom territory to allow savers to cross it confidently. This research underlines the importance and value of our proposal of quality assured products, a Retirement Quality Mark, combined with strong signposting by trustees and providers to help savers spot reliable products that are likely to work for them – effectively providing a map that clearly shows the various routes available to them.” 

The Pension Quality Mark consulted with its holders, friends and wider stakeholders earlier this year on developing a Retirement Quality Mark. Further details on the Retirement Quality Mark consultation can be found on the Pension Quality Mark website.

Read Pension freedoms: No more normal.


This analysis was drawn from the following research: 

  • Quantitative research was conducted in March/April 2015 (the baseline survey) and again in October 2015 (the follow up survey)
  • The baseline survey of 1,042 adults aged 55-70 was carried out by phone and online; the results are weighted to be representative of the population
  • The follow up survey was an online survey of over 2,000 adults aged 55-70; 203 of the interviews were respondents to the baseline survey (who fell within an eligibility criteria for taking part in the follow up)
  • From May – September 2015, twenty-four 55-70 years olds participated in an online/paper lifelog; the lifelog allowed participants, who believed they would make a decision about how to take their pension by August 2015, to record their thoughts and actions about the process for taking a pension under the new pension freedoms.


Eleanor Carric

Eleanor Carric
PR Manager


Navigate to ...