Why planners are set for a happier retirement – research
People who plan generally feel happier financially and enjoy a better retirement. This is true across generations, genders and income levels.
Planners are around three times more likely to feel positive about their financial situation than non-planners (61% vs 21%).
For people on lower incomes, financial planning also appears to provide benefits. Among those with total household incomes of less than £30,000, people who do a great deal of planning are more than three times as likely to describe their financial situation as ‘comfortable’ than those who do no planning (36% vs 10%).
These findings are from Standard Life’s Retirement Voice 2023 report, which, for the third year running, surveyed the views of around 6,000 people in the UK from all walks of life.
The effect of guidance
Standard Life’s research also indicates that people benefit from supplementing their planning with free guidance.
Compared with those who look after their own planning, those who use guidance are significantly more likely to say they understand financial products (81% vs 64%) and feel more confident about how they’ll access their pension savings (72% vs 58%).
In fact, people who plan for retirement and seek free financial guidance – from sources such as the Money and Pensions Service or Pension Wise – are generally the most assured in their financial knowledge and decision-making.
Despite these benefits, just 29% of people say they’ve done a ‘great deal’ of retirement planning. This picture hasn’t changed significantly since 2021.
People aged 43–58 (21%), those with household incomes of less than £30,000 (22%), and women (24%) are among the least likely to be planning for their retirement.
Feeling overwhelmed
One of the biggest barriers to planning appears to be that people just don’t know where to start.
Half of those surveyed (49%) say they find the amount of information they receive about their pensions ‘overwhelming’.
With respect to their pension savings, the information people want to know about most is how much they have in their pension pot (37%) and what income this might potentially give them in retirement (39%).
Consolidating their pensions could help provide this information – and in turn encourage more people to plan for their retirement.
Yet only one-in-five people consolidate their pensions, with the main barriers for doing so being:
- Not knowing how to consolidate (25%)
- Being uncertain whether the savings are better staying as they are (17%)
- Worrying about making a mistake (13%)
Combatting the guidance gap
As more people struggle through the cost-of-living crisis, financial planning arguably has an even more critical role to play in helping them manage not just their financial pressures, but also the potential adverse mental and physical effects of financial worry.
Against this backdrop, we need to do more to give people the tools to plan for their retirement, while promoting the benefits of seeking guidance or advice.
Ultimately, however, we must make support available to whoever needs it most. And this has to be personal, relatable and engaging. Only then can we hope to foster better financial and social wellbeing for all.
In partnership with Standard Life
Standard Life are part of Phoenix Group, the UK’s largest long-term savings and retirement business. We both share an aligned ambition to help every customer enjoy a life full of possibilities.
