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More than a third of over 50s unsure how to access pension savings, report finds

Scottish Widows found that 41% of over-50s who are still working have little or no understanding of the different ways they can access their pension savings.

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More than a third of over 50s unsure how to access pension savings, report finds
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More than a third (34%) of workers aged over 50 have not decided how they will access their pension savings as they approach retirement, according to Scottish Widows’ latest Retirement Report.

The research found that 41% of over 50s who are still working have little or no understanding of the different ways they can access their pension savings in retirement, while just 25% feel confident that they know all the main options available.

The knowledge gap was greater among women, with 46% of women over 50 who have not yet retired reporting little or no knowledge of their retirement options, compared with 35% of men.

Scottish Widows also found differences between workers’ intentions and the decisions made by those who have already retired.

While 46% of workers expect to take their tax-free cash as soon as they can, 64% of retirees did so.

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Meanwhile, 20% of workers plan to buy an annuity, compared with 28% of retirees who chose one.

More than four in five (81%) over 50s agreed that seeking advice or guidance before accessing their pension was important.

However, 19% plan to seek support only in the year they retire, while 15% do not know when they will seek help and 8% do not expect to seek advice or guidance at all.

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The research also indicated an appetite for technology-based support, with 42% saying they would use artificial intelligence (AI) tools to explain complex pension terminology and translate industry jargon into plain English.

Carolyn Jones, retirement director at Scottish Widows, said: “Turning 55 opens the door to pension savings built up over a lifetime, but while access to that money brings opportunity, it also brings important decisions that can shape retirement for decades to come.

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“That’s why we need to bring the conversation forward. Too many people only fully engage in their retirement planning when they approach the point of taking action.

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“By then, valuable opportunities to plan, prepare and make informed choices may already have been missed.”

She added: “The industry is making progress. Targeted support, guided retirement journeys, digital advice and workplace education are all helping people navigate increasingly complex decisions. But we need to go further.

“Our rallying cry is simple – engage earlier, understand your options and seek advice sooner. And, as an industry, we have a shared responsibility to give every customer the knowledge and support they need.

“For example, Scottish Widows’ app helps customers better understand what they have in terms of pension savings, track lost pots and decide what to do with them in just three simple steps.

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“The earlier people think about their income needs, the more choices and confidence they have to achieve the lifestyle they want.”

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