UK Adult Financial Wellbeing Survey 2021: Future Focus
Published on:
01 November 2022
As people approach later life, they need to know how much they should be saving into their pension and what options they have for accessing it. As part of the UK Adult Financial Wellbeing Survey 2021, the Money and Pensions Service (MaPS) examined attitudes and actions relating to planning for retirement and later life.
In particular, MaPS looked at the amount individuals have done to plan their future finances and the extent to which they understand enough to make the related financial decisions.
The Future Focus report was produced to support our work on the UK Strategy for Financial Wellbeing. Future Focus is one of the five pillars of the Strategy, with a goal of five million more people understanding enough to plan for, and in, later life.
Since 2012, automatic enrolment in pensions schemes has successfully created millions of new savers through a passive approach, and pension freedoms now give more options and flexibility. However, to get the best out of these options people need to know more and be confident making choices. As such, a shift from passive to active engagement must take place.
The results of this study suggest that the language of pensions products is still intricate and confusing, even for highly literate and numerate people.
How the Future Focus study was carried out
The Future Focus report is based on retirement planning questions in MaPS’ Adult Financial Wellbeing Survey, a nationally representative survey of 10,306 adults living in the UK. These consisted of online and postal interviews during July to September 2021. The research was conducted for MaPS by Critical Research.
The report is based on 8,453 working age respondents (those aged 18–65). Data is weighted to be representative of the UK 18+ population by region/devolved nation, age, gender, Indices of Multiple Deprivation, housing tenure, urbanity, ethnicity, working status and internet usage.
Key findings
Around half of the working age population don’t feel they understand enough about pensions to make decisions about saving for retirement. The same proportion don’t have any plan for their retirement finances.
This has improved slightly since 2018, including in groups such as young adults (18–24). However, there is still a lot of work to do to encourage people to plan their retirement finances.
Gender stands out as a big issue: there is persistently a large gap between women and men in terms of planning for retirement.
- Six in ten (60%) women do not have a plan, compared to 44% of men.
- Four in ten (39%) women say they understand enough about pensions to make decisions about saving for retirement, versus 55% of men.
Behavioural bias research shows that people live for today. People find it hard to make trade-offs between spending now, saving for the short term, having safety-net savings and planning for later life.
What’s next
This report highlights the work still to be done in driving more engagement with retirement planning.
MaPS is working to support consumers and improve their retirement outcomes through a number of activities set out in the UK Strategy for Financial Wellbeing Delivery plans. These include:
- A retirement planning hub, incorporating MaPS’ pensions dashboard, which will support people with personalised guidance at every stage of their pension journey.
- A mid-life MOT, a digital proposition for people aged 45+ to help them track their financial wellbeing and give bitesize guidance to support them in meeting their goals.
- Holistic financial wellbeing guidance for people in later life.