A decade after pension freedoms, savers still struggle with retirement choices

Now in its tenth year, New Choices, Big Decisions continues to offer unique insight into how retirees behave. The latest study introduced a new cohort of retirees, allowing direct comparison with those first interviewed in 2015. 

The findings are striking, even with years of policy change and industry innovation, the same patterns of short-term thinking, inertia and uncertainty continue to dominate retirement decision making. The behaviours seen in 2015 have not disappeared, they’ve simply reappeared in a new generation of savers.  

As Kirsty Ross, Director of Proposition at People’s Partnership, notes: “The vast majority of savers don’t want to become pension experts; they just want straightforward options that help them turn their savings into a steady income.” 

Savers turning to social networks as traditional guidance falls short

Some savers told us they are increasingly turning to Facebook retirement groups and other online communities for help navigating their pension options. They often find these platforms easier to understand than provider websites or regulated guidance services – even though the information shared may not always be accurate. 

This shift reflects a broader issue highlighted throughout the research that pension communications still aren’t landing. Savers struggle with complexity, and provider guidance often arrives at the wrong moment or uses language that doesn’t resonate. Despite the growth of tools and support services, many people still report feeling overwhelmed — leaving social networks to fill the gap. 

The result is a growing reliance on informal tips from friends and acquaintances at exactly the point where savers most need clear, trusted information. 

Tax-free cash is popular but rarely part of a long-term plan

Many people continue to take the full 25% tax-free lump sum – often while still working and even when they hold significant cash savings elsewhere. Rather than treating it as part of a retirement strategy, many see it as a readily available windfall, spending it quickly or moving it into low interest accounts.  

What many don’t realise is that taking the lump sum early can reduce their long-term retirement income. Few savers are aware that it doesn’t have to be taken all at once – and that taking it gradually could help their pension last longer.

A decade of insights points to the need for guided retirement solutions

For the first time, this year’s study explored people’s reactions to guided retirement solutions – structured pathways designed to give savers clearer direction as they turn their pension pots into income. With the Pension Schemes Bill accelerating the move toward more ‘do-it-for-me' options, these insights arrive at a pivotal moment. 

Participants were shown different design features, including:

• flexible withdrawals
• optout engagement mechanisms
• later life longevity protection

Initial reactions were positive, with many welcoming simple, prebuilt solutions that reduce complexity and offer a more predictable income. For those who feel overwhelmed by today’s choices, guided pathways could provide the clarity and confidence they’ve been missing.

Simpler, better-timed support is needed

Kirsty Ross, Director of Proposition at People’s Partnership, emphasises the scale of the challenge: “Savers are still faced with too much complexity and the wrong kind of support, so it’s no surprise that many are turning to social media instead of professional sources.” 

After a decade of evidence, the conclusion is clear: retirement decisions remain unnecessarily difficult. By delivering support that is easier to understand, better timed and aligned with how people actually make decisions, the industry can help savers feel more confident and better equipped to plan for their future.