One in three workers aged over 50 has not yet decided how they will access their pension savings, and understanding the pension options available to over-50s is something many are leaving far too late, according to research published by Scottish Widows.
A pension is a long-term savings pot, often built up over decades of working life, that you draw on in retirement. The key decisions (when to access it, how much to take, and in what form) can have lasting consequences for your income throughout retirement, which makes early planning particularly important.
Women face a wider knowledge gap on pension options
The gender split in the findings is considerable. Nearly half (46%) of women over 50 who have not yet retired said they have little or no knowledge of their retirement options, compared with just over a third (35%) of men. That gap reflects a broader pattern identified by the Money and Pensions Service, which found that 60% of women, compared with 44% of men, do not have a plan for their money in retirement. Together, these figures paint a consistent picture of women entering retirement with less preparation and less confidence than their male counterparts.
The reasons behind this gap are likely to be multiple and longstanding. Career breaks, part-time work, and lower average earnings can all reduce the amount women accumulate in pension savings over a lifetime. But the Scottish Widows research suggests that a lack of engagement with the options available compounds the problem further.
Most people know advice matters, but many wait too long to seek it
There is no shortage of good intentions. More than four-fifths (81%) of over-50s said they believe it is important to seek support before accessing their pension. Yet nearly a fifth (19%) plan to seek advice only in the year they actually retire. By that point, several of the most useful planning decisions may already be off the table.
Carolyn Jones, retirement director at Scottish Widows, put it plainly: ‘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. By then, valuable opportunities to plan, prepare and make informed choices may already have been missed.’
Jones acknowledged that the industry is moving in the right direction. ‘Targeted support, guided retirement journeys, digital advice and workplace education are all helping people navigate increasingly complex decisions. But we need to go further,’ she said. Her message to savers was direct: ‘Engage earlier, understand your options and seek advice sooner.’ She added that the earlier people think about their income needs, ‘the more choices and confidence they have to achieve the lifestyle they want.’
Where to start if you are approaching retirement
Several free resources are available to help people get to grips with their retirement planning before it becomes urgent. The government-backed MoneyHelper website offers pension guides and tools, and the government-backed Pension Wise service provides free, impartial guidance specifically for people aged 50 and over who have a defined contribution pension. Many pension providers also offer their own retirement calculators, which can help savers check whether their pot is broadly on track.
For those wanting a concrete sense of what retirement might actually cost, Pension UK’s retirement living standards, available on its website, set out indicative annual budgets for different lifestyles in retirement, from a minimum standard to a comfortable one.
Some people will also want to consider taking regulated financial advice, particularly if their circumstances are complex or their pension savings are substantial. Unlike free guidance, regulated advice is personalised and comes with formal consumer protections.
The Scottish Widows research drew on a YouGov survey of more than 6,200 adults, a further survey of 1,000 UK adults, and responses from more than 2,300 people aged over 50, all carried out in February.
