Financial security

Planning for retirement: the pensions knowledge gap and attitudes to working longer

Standard Life Centre for the Future of Retirement

September 11, 2023

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The 2021 Census revealed that the proportion of people aged over 65 exceeded the proportion of children aged 15 or under for the first time (ONS, 2023). Improvements to long-term life expectancy and an increasing state pension age has made planning for retirement more important than ever. But how much do people know about pensions during their working lives and what are their expectations around retirement age and working beyond this?

We have partnered with the National Centre for Social Research to:

Provide evidence on people’s preparedness for retirement by examining knowledge on pension issues and use of workplace and private pensions
Gain an understanding on people’s expectations for retirement and if/how these have changed in recent years.
Contribute to the evidence base on potential incentives that might encourage longer participation in the labour market.

Having good knowledge of pensions and an understanding of different potential pathways to retirement makes people better equipped for important decisions about their financial security later in life.

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Summary of findings

The report analyses data collected from the British Social Attitudes (BSA) 2021 survey. All findings are generalisable to the UK population.

Pensions knowledge	Informal sources such as family and friends were the most commonly reported sources of information about retirement and pensions 58% of adults reported low confidence in their knowledge of pensions. Over a quarter (28%) stated that they knew little or nothing about pensions, and just 11% reported having good knowledge of pensions issues. Sex, age and income were all statistically significant predictors of reported pension knowledge, with men, older respondents and higher earners all more likely to say they have higher pension knowledge. Workplace & private pensions
Workplace & private pensions	65% of respondents said they knew little or nothing about workplace pensions. 60% of people said they knew little or nothing about private pensions. Most employees (78%) agreed that regularly saving into a workplace pension was something they were used to doing. This highlights the importance of default saving mechanisms such as Automatic Enrolment.
Working up to & in retirement	Working up to & in retirement When asked what employers could do to encourage people to work longer before retiring, the most popular responses were being able work to part-time (59%) or work flexible hours (58%). Women were twice as likely as men to take up part-time work in the three years leading up to their retirement, with 26% of women reporting they had reduced their hours compared to only 13% of men. Half (50%) of all of working respondents believed they would be likely to do further paid work after retiring from their main job.
Expected vs actual retirement age	Most people expected to retire from their main job in their 60s and the average age people expected to do so was 65, which is below the current state pension age of 66. Just over half (51%) of people expected to retire before state pension age. The average retirement age of already retired respondents was 62. This is lower than the average expected retirement age of those who were still working (65).

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Planning for retirement: the pensions knowledge gap and attitudes to working longer

Standard Life Centre for the Future of Retirement

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Summary of findings

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