FCA report shows confusion about retirement options
25 October 2017
‘Understanding the financial lives of UK adults’, a report by the Financial Conduct Authority, highlights how uninformed and baffling many consumers find pensions.
Professional Adviser has provided some of the key findings in relation to pensions:
The report found 3% of all UK adults did not know if they had a private pension provision or not, and of those aged over 50 without a pension, 10% had never considered why they did not have one.
The report also found some six million people, or 13% of UK adults, were unsure if they were contributing to a defined benefit (DB) or a defined contribution (DC) scheme. Of those with a DC scheme, more than a third (36%) were either unable or unwilling to say how much money it contained.
Almost a fifth (17%) were unaware of DC charges, and 15% had never thought about the contribution levels needed to maintain a reasonable standard of living when they come to retire.
Meanwhile a minority (4%) admitted they had received and read an annual statement on their DC pension, but did not understand it, and more than a tenth (12%) did not know how much they were contributing.
Alarmingly, some 900,000 people who had accessed a DC pension in the last two years said they did not understand access options "very well".