Lack of knowledge exposes pension freedom fragility


Research reveals vast knowledge gap of 50-75 year olds leading to financial strain

  • Close to 40% of upcoming retirees are still unsure when and how to access their pensions
  • 47% were either unaware of pension freedoms or didn’t know the impact of the reforms on them
  • Data shows that over 25%  of 50-75 year olds had an average of £31,000 of debt at retirement
  • 45% were worried their pension pot would not last their retirement

A quarter of retirees are in substantial debt in retirement and close to half of 50-75 year olds understand pensions or the options available to them, shows new research by Old Mutual Wealth and YouGov.

Findings from the fourth wave of Old Mutual Wealth’s Retirement Income Uncovered report*, takes an in-depth look at the retirement landscape post pension freedoms and finds that the UK’s non-advised population are at risk of making expensive mistakes because of a lack of understanding.

Two years on from the introduction of pension freedoms and close to half of the 50-75 year olds surveyed were either unaware of pension freedoms or do not know the impact of the reforms. This leads them to feel unsure of how to access pensions – with 40% of the 1,500 surveyed unsure of when and how to access the pot of money.

There remains a substantial advice gap with just 14% of the population speaking to a financial adviser. While there are hopes that Pension Wise would fill this knowledge gap, just 4% have used Pension Wise.

This lack of knowledge is fuelling insecurity amongst this age group about their future prosperity with 45% worried their pension will not last their retirement. With the OECD recently revealing UK pensioners are going to receive just 29% of their salary from the state in retirement, this research into personal pension provisions highlights that people are not sufficiently engaged to meet the shortfall.

Ian Browne, pensions expert at Old Mutual Wealth, says:

Ian Browne“We have a new retirement landscape, which means people’s finances are not as clear cut as they used to be. Pension freedoms have given people immense choice, but that means failure to make well-informed decisions means they could lose the opportunity to have a safe and secure retirement. Education and knowledge of personal finance is more important than ever.

“The government are taking a close look at the impact of pension freedoms through the Work and Pensions Committee inquiry. Their report offers the government an opportunity to increase the awareness and uptake of financial advice.

“Promisingly the currently pension minister, Guy Opperman, has put boosting engagement with pensions on his agenda.  He is enthusiastic about the idea of a midlife MOT to assess an individual’s retirement provision at a stage in life when they have time to do something about it. A MOT could prove to be the crucial missing mechanism, one that would shepherded people towards the help they need. 

 “Government, regulators and the retirement industry have a responsibility to give consumers the products, support, guidance and advice to ensure that doesn’t happen.”

*Retirement Income Uncovered: Freedoms in Focus, was conducted by YouGov, who surveyed over 1,500 UK adults between the ages of 50 and 75.

For more information contact

Kathleen GallagherOld Mutual Wealth023 8072 629307990

Notes to Editors:

Old Mutual Wealth is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

Old Mutual Wealth oversees £131.3 billion in customer investments (as at 30 September 2017).

It has an adviser and customer offering spanning: Financial advice; investment platforms; multi-asset and single strategy investment solutions; and discretionary fund management.

The business is comprised of two segments: Wealth Platforms and Advice and Wealth Management.

Wealth Platforms includes the Old Mutual Wealth UK Platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.

Advice and Wealth Management encompasses the financial planning network, Intrinsic; Old Mutual Wealth Private Client Advisers; discretionary fund management business, Quilter Cheviot; and Old Mutual Wealth’s multi-asset investment solutions business.

Old Mutual Global Investors (‘OMGI’) is the asset management business of Old Mutual Wealth with £39.8bn funds under management (as at 30 September 2017). On the 19th December 2017, Old Mutual Wealth announced that it has agreed to sell its Single Strategy asset management business to the Single Strategy Management team and funds managed by TA Associates. The proposed transaction is subject to customary closing conditions, including regulatory approvals. 

Following managed separation from Old Mutual plc, Old Mutual Wealth will rebrand to Quilter plc. Each of the businesses within the Quilter Plc group will be rebranded over a two-year period, with the exception of Quilter Cheviot, which will retain its existing name.

Old Mutual Wealth is part of Old Mutual plc, a FTSE 100 group that provides life assurance, asset management, banking and general insurance. Old Mutual is trusted by more than 19.4 million (as at 31 December 2016) customers across the world and has a total of £212.3 billion of assets under management (as at 30 June 2017).


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