Choice is welcome, but confusion abounds

  • Only 6% of over 55s don’t like having a choice on how to access their pension, almost half (49%) like the choice
  • However, 24% of those who are aware of Pension Freedoms are unsure they understand the options and rules
  • 16% didn’t understand the rules around accessing their pension funds before they did so, while 7% have delayed taking from their pot because of this

At the 2014 Spring Budget the Government announced fundamental reforms to the UK Defined Contribution (DC) pension system to allow pensioners to access their retirement savings more flexibly. Ten years on, new research from Standard Life, part of Phoenix Group, highlights that while those approaching or in retirement are supportive of being able to choose how they access their pension, many do not feel confident about their options and the corresponding rules.

Only 6% of over 55s say they don’t like having the choice to access their pension in the way they’d like – almost half (49%) say they like the choice. However, among over 55s who have heard of Pension Freedoms, a quarter (24%) feel unsure about whether they know and understand the different options and rules around accessing their pension funds, and 13% admit they do not feel confident about this.

The research demonstrates that people need more information and support to help them make their retirement choices, as 15% of over 55s say they feel overwhelmed at the options for accessing their pension. Worryingly, 16% admit they didn’t understand the rules around accessing their funds before they did so, while 7% have delayed taking from their pension because they didn’t understand their options.

While Pension Freedoms have given people flexibility and choice, it’s also given them responsibility over managing their retirement savings – and 15% are worried that since they have drawn from their pension they don’t have enough to live comfortably. A further 7% also say it's been difficult to manage their pension.

Mike Ambery, Retirement Savings Director at Standard Life, part of Phoenix Group commented: “Pension Freedoms opened up the retirement futures of millions of DC pension savers, giving more choice and flexibility around how they could access their savings, and overall those approaching or in retirement have been supportive of this. However, with greater freedom came greater individual responsibility, and it’s clear that a number of over 55s have found this overwhelming and the options confusing. As such, more needs to be done to ensure people feel confident they can make decisions about taking money from their pension.

The fact that retirement saving is often not seen as an immediate priority and there’s a perception that pensions can be quite complex has led to people lacking education around and engagement with their pension. As things stand, many also reach retirement with less in their pension than they’d expected, making the decision on how to access limited savings even more vital, and difficult. Improving access to affordable financial advice is key to improving people’s confidence and chance of securing good retirement outcomes, and we welcome the FCA’s current consultation into the advice guidance boundary. In the meantime, many pension providers give guidance and tools to support decision making at and on the approach to retirement.”


Notes to editors:

[1] Opinium conducted research among 2,000 UK adults aged 18+ between 5th and 8th March 2024.  Results were weighted to be nationally representative.

Annuities resurgence

Pete Cowell, Head of Annuities at Standard Life, part of Phoenix Group comments on the 10th anniversary of the Pension Freedoms Reforms and the resurgence of annuities: “Pension Freedoms immediately transformed the retirement landscape on their announcement a decade ago. The freedom, flexibility and choice, they introduced also put the onus firmly on people to make choices regarding their retirement income and led directly to a growth in drawdown, alongside the complexities that come with calculating how long your money needs to last.

The ongoing case for innovation

“The 10th anniversary of these reforms serves as an important reminder of how much work there is still to do as an industry to make sure people are getting into the right product or product mix at the right time. For many, this may involve an element of guaranteed income, particularly amid the continued decline of defined-benefit pensions.

“There is also a growing understanding that retirement income planning shouldn’t follow a ‘once-and-done’ approach. The concept of annuitising in stages is emerging as a strategic approach for many retirees seeking to balance income security with flexibility. By purchasing an annuity in tranches throughout retirement, individuals can receive an income in retirement which is aligned to their risk appetite, with the element of guaranteed income increasing over time.

“The option to combine retirement income solutions is also coming to the forefront, following a more blended approach of both drawdown and annuities to offer the best of both worlds – certainty and security as well as flexibility and potential growth.

The resurgence of annuities

“While the combination of newfound freedoms and a period of low interest rates saw annuity sales fall, the fundamental customer need they met never went away and income certainty is something 9 out 10 say is important to them in retirement.1 Rising interest rates over the last two years have led to a resurgence of annuity interest. The ABI’s latest annuity data which shows the annuity market increased by 46% in 20232.

Improving rates have also played a role, with the average annuity rate in February 2024 for a healthy 65-year-old was c6.89%3. While annuities are unlikely to go back to being the default income option for the majority of retirees anytime soon, their return tells us just how much people value peace of mind.”


Notes to editors:

 [1] Retirement Voice 2023 - Retirement Voice 2023.pdf (
[2] Association of British Insurers: 2023 sets new post-pension freedoms record for annuity sales
[3] Figures based on a £100,000 pension pot. Annuity rates data provided by AMS Retirement. Accurate as of March 2024



Samantha Griffith
Standard Life
07752 465345

James Merrick
Standard Life
07974 063067


About Standard Life

  • Standard Life is a brand that has been trusted to look after peoples’ life savings for nearly 200 years 
  • Today it proudly serves millions of customers who come to Standard Life directly, through advisers and through their employers’ pension scheme.
  • Standard Life is part of the Phoenix Group, the largest long-term savings and retirement business in the UK. We’re proud to be building on nearly 200 years of Standard Life heritage together
  • Our products include a variety of Pensions, Bonds and Retirement options to suit people’s needs, helping our customers to invest and save for their future. We’re proud to offer a leading range of sustainable and responsible investment options.
  • We support our customers on their journey to and through retirement with comprehensive, easy-to-understand guidance so they can invest in the right way for their needs, and plan a future they feel confident about.
  • The value of investments can go down as well as up, and may be worth less than originally invested. 

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