Five key things we’ve learned about you from our member research
We recently invited members of our DC pension schemes to take part in our annual research. Here are five our key findings.
We recently invited members of our DC pension schemes to take part in our annual research. Here are five our key findings.
Back in January, we invited members of our Defined Contribution (DC) pension schemes to take part in our annual research conducted by an external independent research agency to give their views in relation to our products and services and also to help us understand your perspective towards your pension savings in general – including what helps or stops you from engaging with your pension and planning for your financial future.
Thank you to everyone who took the time to take part – 2,575 of you! The research has provided some fascinating insights which we’ll take on board to shape our services and support. Below we’ve summarised five of the key findings:
70% of you who are actively contributing into your TPT pension said that it forms a reasonable or large part of your retirement funding plans. Other planned sources of pension income include the State Pension, other pensions/savings, releasing equity in your home or downsizing to free up cash and also expected funds from an inheritance. 30% of you said you expect to continue working in some capacity – evidence that the traditional definition of ‘retirement’ where you stop working, is changing for many of us.
A further key finding is that some of you aren’t aware that the default amount you contribute into your pension may not be sufficient to help you achieve the lifestyle you hope for when you wind down from work or stop working completely and that you should consider reviewing this to ensure you’re on track: 18% of you said you thought the default amount was sufficient and 33% of you said you were unsure.
That highlights that there’s work we need to do to help members better understand how their pension works and how much you might need to save to get the best outcome possible. As a starter to help you with this, you might like to take a look at our interactive video quiz and pension savings tool.
Employer contributions and tax relief are two great benefits of contributing to a workplace pension that can really help your pension savings pot grow. However, our survey has shown that this is still something that a lot of our members aren’t aware of, or don’t fully understand.
8% of you said you weren’t aware that your employer also pays into your pension pot, and 22% said you weren’t aware that they can change the amount you contribute to your workplace pension. Meanwhile 44% said you’re not aware of the they receive tax relief on your pension contributions.
For more information on auto-enrolment and employer’s contribution click here, and for more on how tax-relief works, click here.
The gender gap is something that exists in one way or another across a wide variety of metrics. It’s often talked about in reference to pay, but it exists in the world of pensions as well.
Of course, some of this is directly related to pay as where women are paid less, they are naturally saving less into their pensions.
But this ‘gap’ also extends beyond just the financial aspect of pensions, with our research showing that women are significantly less confident about the understanding of their pensions than men. We found that 36% of women feel confident making decisions about saving for retirement (compared to 43% of men) while just 28% of women are confident in how their pension is invested, compared to 36% of men.
Perhaps as a result of this, women are also less engaged in their pensions, with just 35% reviewing their pensions regularly compared to 45% of men.
We encourage everyone to be proactive in planning for their retirement, but to help close the gender pension gap, research shows that this is currently of particular importance to women. If you feel like you could use some help, we’ve included some pointers here.
When it comes to members who are approaching their retirement, what’s clear is that there isn’t one size fits all for how they want to access their pension savings.
For members who are aged 50 – 59, 49% of you are not yet sure exactly how you’ll access your pension savings when you retire. But for those who have decided, there’s far from a universal preference with 23% planning to opt for a drawdown income over time, 16% wishing to take a lump sum and 6% planning to buy an annuity.
For members who are age 60+, you are understandably a bit more confident in your plans - although 39% say you are still not sure how you want to access your pension. For people in this age group, the most popular choice is that they plan to take a lump sum (26%), followed by a drawdown income over time (21%) and buying an annuity (5%).
This shows how people in different situations are planning different approaches to their retirement.
Following our 2023 survey, we’ve taken steps to help provide you with access to more guidance and support. This includes our Pensions Learning Hub with a range of live webinars and pre-recorded video guides designed to take members of all age groups through the basics of your TPT pension, including how it works, how to get started, and what to do when you’re getting close to your target retirement age.
Initiatives like this have contributed to you having a greater understanding of your pensions and are taking a more active interest than you were 12 months ago. Some key findings from our survey include:
There’s still plenty more work to be done but we’re glad to see that we’re all moving closer to becoming pension pros!
Survey submitted to TPT members with a Defined Contribution (DC) pension in January 2023. Findings and statistics taken from 2,571 completed surveys.