19th March 2015 at 3:29pm
Did you know nearly half of UK adults are looking to improve their finances in 2015?
Our latest research into spending and saving in 2015 has given us a fascinating snapshot of the current state of play with people’s personal finances in the UK. It gave us real insight into how they feel about their financial situation; what they plan to save and spend in 2015; and in particular, how those aged 55 and up intend to make use of the new pension freedoms that come into effect on 6 April.
We gathered a lot of interesting feedback so we’re running a couple of blogs to pass on some of the facts and stats. The emphasis in this blog is going to be on pensions, with savings in general covered in the next one.
Pensions have been big news recently, with automatic enrolment into company pensions over the past couple of years and the pension reforms coming into effect this April, so we were particularly interested to understand what people think about them.
Here are some of the highlights.
38% of UK adults don’t have a pension
Our research found that 33% feel worried and nervous about their money situation in general. However, this may be based more on external factors than their own ability to manage their finances, as 60% also stated that they feel on top of managing their money. Only 15% felt optimistic and happy about their financial outlook.
Part of this may be due to one of the most significant findings of our research, which is that almost four out of ten UK adults don’t have a pension. What’s more, only 6% of 18-54-year-olds and 1% of adults aged 55 and up plan to start one this year.
However, it does appear the older generation are feeling a lot more confident about their finances than the younger, with 52% of those aged 55 plus reporting that they feel comfortable about their money situation in 2015, versus just 37% of 18-54-year-olds.
10% of UK adults aged 55 plus plan to take money out of their pension
Our research also indicates that one in ten UK people aged 55 or above plan to take advantage of the new rules and withdraw money from their pension pot.
So how else does this age group plan to manage their pensions? 45% of those aged 55 plus who responded to the study plan to maintain their pension contributions at their current level, whereas 2% plan to increase their contributions and another 4% plan to actually reduce or pause their contributions.
The pension divide
Whether you’re saving for your retirement, or about to retire, the changes announced in the 2014 Budget could give you more freedom, choice and flexibility than ever before over how you access your savings and it’s important to make the most of it.
While this is great news for us all, previous research we’ve carried out shows there’s still a degree of confusion as to what our options are and how the new rules will affect us. This could certainly be steering some of the decision making outlined in our most recent research.
Bridge that gap
Financial providers, the Government and independent organisations are taking steps to address this using their industry expertise; knowledge and digital know-how to help you map out a route that suits.
And that includes us. If you’d like more information on your retirement options it’s worth going online and checking our ‘Get ready for retirement’ page. We’ve kept it simple. You can get the basics with our guides, compare ideas with our retirement pathfinder and explore your options and plan ahead with the retirement planner.
To quote the Austrian born management consultant, educator and author Peter Drucker: ‘Today knowledge has power. It controls access to opportunity and advancement.’
A statement that rings true and captures the importance of understanding the opportunities winging our way from April.
Join the conversation
This blog and any responses to comments are not financial advice.
A pension is an investment and investments can go up or down. This means you might not get out what you put in. Tax and legislation can change in the future and this blog reflects our understanding of the rules as at 19 March 2015.