Savers are turning to Facebook groups for retirement guidance, amid confusion about pension options and a lack of engagement with provider tools or guidance services
Research by People’s Pension found that many people were looking for help online or on social media, despite knowing the information they find might not always be accurate.
This findings were in the latest edition of its New Choices, Big Decision research, a longitudinal study which has tracked the behaviour and experience of older savers since pension freedom rules were introduced in 2015.
It found that a decade on there is still widespread confusion about retirement options, with many people unsure how to turn their pension pot into a regular income.
The research has consistently highlighted how many people’s focus is primarily on taking the tax-free lump sum, which it says if often seen as “additional disposable income”, used to fund shorter-term expenses, such as home improvements, gifts or debt repayment. The report adds that this money is frequently taken while people remain in work, with many people failing to understand the impact this will have on their longer-term finances.
It adds that many still fail to understand that tax-free cash can be access gradually.
Despite industry efforts to improve engagement, the study shows savers continue to find pensions confusing, with generic communications often arriving “at the wrong time or in the wrong tone”. Many report low confidence in choosing retirement products and instead seek answers online including from peer-led Facebook groups, which they report are easier to navigate than official guidance or provider websites.
Since the first edition of its study in 2015, People’s Pension has called for the introduction of default decumulation products to help improve retirement outcomes, a proposal that is now moving forward with the Pension Schemes Bill, which will require schemes to offer default retirement income solutions in future.
Ahead of these being launch, this study also looks at how guided or default solutions might work in practice. People’s Pension concludes that that opt-out designs tend to work better than opt-ins, an annuity or longevity insurance is best introduced around age 75, and flexibility around early withdrawals is essential.
However, it says that persistent negative perceptions of annuities — rooted in fears of dying early and a desire to leave inheritances — remain a significant barrier that future product design will need to overcome.
People’s Pension director of proposition Kirsty Ross says: “This research shines a light on just how difficult it still is for the average saver to make sense of retirement saving after 10 years of pension freedoms. Savers are still faced with too much complexity and the wrong kind of support, so it’s no surprise that many are turning to social media for help instead of professional sources. The system isn’t giving people the clarity or confidence they need to make decisions that will shape the rest of their lives.”
She adds: “The reality is that the nice, clean vision for retirement of policymakers and pension providers rarely plays out smoothly in practice. Real-life retirement journeys are far more complex and, as our study clearly shows, people need simpler but better targeted support, underpinned by strong default pathways.
Ross called for guided retirement solutions that offer “flexibility, simplicity and inclusivity”, backed by clear, well-timed communications that reflect how people actually behave — not how policymakers assume they behave.
She adds: “The vast majority of savers don’t want to become pension experts; they just want straightforward options that help them turn their savings into a steady income. The next step is designing products around real needs, with communication and practical guidance that supports every saver.”
