While the consumer view is generally positive, the survey found that many are concerned about the risks. These include 47% worrying that people will be mis-sold unsuitable retirement products, 44% worrying they may make bad financial decisions and lose their money and 36% fearing they will lose their money in scams.
The National Association of Pension Funds published the research findings this week on what pension savers (age 55-70) plan to do with their retirement income in light of the imminent pension freedom reforms. The NAPF commissioned Critical Research to conduct an online consumer poll of those aged 55-70 with private pensions, who will have access to the new Pension Freedoms starting on 6 April. Fieldwork took place between 25-30 March 2015, and findings are from a nationally representative online survey of 850 savers.
Joanne Segars, chief executive, NAPF, said: "It's great news that days away from their launch there's still a high degree of support for these reforms; but savers are also worried about some of the risks as most decisions now fall on their shoulders. It's clear there's much for the Government and industry to do to ensure these fears do not turn into reality.
Pension savers were asked what they are most likely to do with their defined contribution (DC) pension savings:
• Nearly half (49%) will either wait to see how things work out nearer retirement or are not yet sure what they will do;
• Nearly a fifth (18%) said they will leave it all invested and draw a regular income;
• 5% will buy an annuity;
• 4% will take it all as cash; and,
• 24% of people said they will use a combination of these options.3
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Almost three quarters (74%) of respondents who expressed a preference on how they intend to access their savings were planning to leave a proportion of their savings invested and draw a regular income.
Half (50%) of people who have a plan for their savings intend to take as cash some of their taxable pension savings. Just over a quarter (27%) of these people said they would spend it on a one-off purchase such as a holiday or a car. But the majority (67%) think they will save and invest it, only spending it gradually.
A quarter (25%) of savers who have a plan for their savings, intend to buy an annuity with all or part of their taxable pension savings.
Three quarters (77%) had heard of Pension Wise but nearly a quarter (23%) had not heard of Pension Wise. Just over half of respondents (51%) were very or quite likely to use Pension Wise and 35% were not very likely or not likely to use Pension Wise.