UK Snapshot

The concept of retirement remains constant. The reality of retirement continues to change.

Since Freedom and Choice in 2015, pension scheme members have more options than ever. But this freedom can make it more difficult for them to decide among the array of investment and income options.

In this report, we look at the expectations of UK workers and compare these with the reality of retirees — in terms of spending needs, consumption sacrifices, income preferences and sources for advice.

Here’s a preview of a few of the findings:

People in the UK realise there is a retirement challenge

The good news is that people in the UK are aware of the challenge before them, realising that the amount they’re saving will not be close enough to what they will need to fund their retirement.

Workers are realistic about their expected income in retirement

People know that their income will decrease in retirement and most expect their retirement income will fall by around half. This is quite accurate when you compare it with the income retirees are receiving in retirement as a ratio of the income they received when they were working.

Recognition that changes lie ahead

Importantly, most people recognise that ultimate responsibility for their income in retirement sits with them and they are prepared to do something about it.

The sooner the better

The most common advice retirees feel they can give current savers is to start saving earlier (69%) followed by engaging with their pension earlier (65%). However, this is not what’s currently happening - only 15% of people in the working population stated that they have actually begun seeking help with their pension.

More freedom, similar choice

Although only 30% of retirees surveyed bought an annuity, 70-80% of those in the working population and approaching retirement said they would value a solution from their employer that provided a predictable income. This shows that although the popularity of annuities may have fallen with the introduction of Freedom & Choice, people still value stable income.

What does this mean for sponsors, schemes and the wider industry in helping members to achieve better retirement outcomes?


The views expressed in this material are the views of SSGA Defined Contribution as at 10 September 2018, and are subject to change based on market and other conditions.

This document contains certain statements that may be deemed forward looking statements. Please note that any such statements are not guarantees of any future performance, and actual results or developments may differ materially from those projected.

The information provided does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. Investing involves risk, including the risk of loss of principal. The whole or any part of this work may not be reproduced, copied or transmitted or any of its contents disclosed to third parties without SSGA’s express written consent.

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2240377.2.1.GBL.RTL Exp. Date 31 October 2019