Spike in inquiries to The Pensions Advisory Service following landmark freedoms
The government’s Pensions Advisory Service (TPAS) recorded more than 180,000 inquiries in the past year following the introduction of landmark freedoms which gave people approaching retirement unfettered access to their pension pots.
Analysis shows that the most likely trigger prompting people to make an inquiry was reaching the point of retirement or beginning to receive pension payments.
The next most important prompt was when people began to save for retirement, as data shows 17% of inquiries were from those at the point of enrolling into a scheme or wanting more information about starting contributions.
Men lead on inquiries as the data shows 39% of women contacted the service and overall, the average age of people using TPAS was 59.
In sharp contrast those under 40 only accounted for 8% of all inquiries.
What impacts pension behaviour?
TPASs latest survey on women and pensions found there were three barriers that have the most impact on behaviour: confidence, confusion and trust.
It found that 43% of those surveyed admitted they didn’t feel confident in making decisions around saving for retirement. And for those aged 18-30, confidence levels are lowest for those starting their careers.
A majority of people said they didn’t understand how their retirement income would be provided and 73% said they thought the State Pension would enable them to live a comfortable retirement.
But a third said they didn’t know how much pension they would receive or how to get an estimate while 71% said they thought pensions were complicated.
The figures come as the ‘Realising Pension Revolution’ event was held this week. Pensions minister, Baroness Ros Altmann, told the audience that she firmly believes there will always be a State Pension in light of calls by Michael Johnson – he came up with the Lifetime ISA idea – to scrap the system.
Altmann said that while some women will lose out under the new State Pension, by 2030 over three million women will be £11/week better off than if they had remained under the old system. Further, she went as far to say that under the new State Pension scheme, over their lifetime, women will receive more State Pension than men.
She added: “The pensions landscape has changed rapidly over the last year and it is important that people understand what the changes mean for them. It is important that people of all ages start planning for the future – not just those nearing retirement. They often need help in understanding how pensions work and The Pensions Advisory Service can provide valuable help.”
Michelle Cracknell, CEO of TPAS, said: “The majority of consumers still find pensions complicated and find it difficult to take the action needed to make adequate later life provision. The introduction of pension freedoms has triggered a step change in awareness and engagement but there is still a way to go before people are confident on what is needed to secure their retirement.”