New pension rules, choices people make
How can we improve decision making on pensions?
University of Birmingham (Centre on Household Assets and Savings Management)
May 2022
For more and more people, defined contribution pensions are becoming an important means of saving for retirement and many pension providers are offering this product. However, defined contribution pensions offer less secure, guaranteed income for life.
This report provides insights into decision making experiences following recent changes to pensions legislation. It looks at the effectiveness of current consumer protection strategies, finding customers:
- Feel confused and overwhelmed by the decision to withdraw defined contribution pensions
- Don’t know who to trust when they need support with their choices
- Have to manage high levels of confusion and uncertainty about the future when making a decumulation decision
Three key recommendations for improving consumer outcomes are made:
- Create more flexible, better value products
- Improve access to regulated financial advice and expand the scope of money guidance
- Expand and develop access to alternative forms of face to face decision making support
The report offers more detail on the methodology used by the researchers, further information on the findings and recommendations, along with some powerful real-life examples of how this affects people.
