14% of working age people are saving more into their pensions following the introduction of the pensions freedoms.
According to research from Aegon, around 5.5 million people are contributing more into a private or workplace pension, with the increased engagement being mirrored in people’s financial planning. Over the last 12 months, the proportion of people seeking retirement advice from an adviser has nearly doubled.
50% of the UK population had taken no steps to review their retirement plans in April 2015; this figure has now dropped to 36%, a fall of 15%.
The growth of UK retirement pots also reflects the recent rise in saving. On average, people’s pension savings have increased from £29,000 in April 2015 up to the current level of £50,000.
As people review the status of their savings more frequently, it seems that retirement income aspirations have also become more reasonable. Annually speaking, £32,000 is the average income which people would like to receive in retirement, dropping from £38,000 just a year ago in April 2016.
Regardless of the more optimistic outlook, 36% of people are yet to engage with their pension savings at all. Reasons for this are wide-ranging; whilst 22% of people state that they lack understanding on reviewing their retirement plans, 15% state that the absence of online information or services obstructs them from going over their pension savings. For 12%, the fear of viewing how little they’d saved was the main obstruction.
Commenting on the impact of the pensions freedoms was Steven Cameron. The Pensions Director at Aegon stated: “The 2015 pension reforms put many more retirees in the driver’s seat for the first time. Two years on and all the signs point to the pension freedoms having paved the way for a smoother road to retirement. Crucially, the proportion of people speaking to an adviser about their retirement saving and income options is almost double what it was in April 2016. Giving retirees the freedom to do as they please with their money is having an impact not only on those who are taking advantage of that freedom today, but the trickle effect is positive down the generations. It seems that bringing freedoms to pensions and saving for retirement has boosted their appeal across working life, with 5.5 million UK savers contributing more to their pots.”
