Product choice ‘just a small part of any pension decision’

Product choice ‘just a small part of any pension decision’

New research from Citizens Advice finds that people’s perception of an idealised retirement is often at odds with their real experience.

In a report out today the national charity looks at how people approach big decisions about pensions and the different factors which influence their choices.

Instead of retiring and being able to go on holidays or renovate their home, the How people think about older age and pensions report reveals many people face challenges managing their money day-to-day, planning future finances with certainty and supporting their family.

Citizens Advice finds that people don’t think about pensions in isolation, rather in the context of other personal and financial decisions. In the first quarter of 2014, of the 1,672 people who sought help from Citizens Advice about occupational and personal pensions, 50 per cent also asked for help on one or more other issues such as employment, tax and benefits, debt, consumer issues or family and relationships.

The report shows people can struggle with competing pressures and keeping up to speed with changes that could affect them, including upcoming pensions freedoms. Many find it hard to make sense of their pension choices, particularly if they face barriers such as low numeracy and literacy skills.

One woman Citizens Advice interviewed for the research said:

‘It’s foolish to sit back and not take control, but I don’t feel tooled-up to do that. [It] makes me feel embarrassed, that I’m so financially illiterate. It’s my own pension future.’

Gillian Guy, Chief Executive of Citizens Advice, said:

‘Product choice is just a small part of any pension decision. People approaching retirement today face very different challenges to their parents at the same age. As life expectancy rises and pressures on households finances grow, many face circumstances they may not have expected as they approach retirement such as adult children needing support or navigating the care system for older relatives.

‘People want to be in control of their finances and able to secure financial resilience and independence in older age. But in a period of economic uncertainty, social change and major reform, many are finding this increasingly difficult.

‘Now more than ever it is vital that people can access support to help them understand their pension options and how they relate to their situation, so they can make informed choices.’

The number of people coming to Citizens Advice for help around pensions issues has risen steadily and last year Citizens Advice Bureaux helped people with over 80,000 pension issues. The number of people using the pensions pages on the Citizens Advice online advice site has also been growing, with figures up by 89 per cent last year compared to 2012.

Notes to editors:

1. The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
2. The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
3. To find your local bureau in England and Wales, visit citizensadvice.org.uk. You can also get advice online at adviceguide.org.uk
4. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers
5. Citizens Advice Bureaux in England and Wales advised 2.3 million clients on 5.4 million problems from October 2013 to September 2014. For full 2013/2014  service statistics see our quarterly publication Advice trends
6. Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 3,000 service outlets across England and Wales.