"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."
This growing engagement is reflected in people’s financial planning, with the proportion of people engaging with an adviser on their plans for retirement almost doubling in the last 12 months.
In April 2015 half of the UK population (50%) had taken no steps to review their retirement plans, but this has now fallen by 15%, to just over a third (36%).
This increased level of saving is reflected in the growth of UK retirement pots. On average, people have £50,000 saved in pensions, up from £29,000 in April 2015.
As people become more active in reviewing the status of their savings, it appears that their overall aspirations for retirement income are also becoming more realistic. The average annual income people would like in retirement is £32,000, a fall from the £38,000 in April 2016, and lower again than the £41,000 people were hoping to retire on at the time of the pension freedoms.
Yet, despite the positive signs, over a third (36%) of people have never engaged with their pension savings. The reasons are varied, one in five people (22%) claim they simply don’t understand how to review their plans for retirement, 15% of people say the lack of online services or information prevents them from checking up on their pension savings and for one in ten people (12%) the main barrier is the fear of seeing how little they have saved.
Steven Cameron, Pensions Director at Aegon said: “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."
