[SPONSORED CONTENT]
This year marks the 10th anniversary of the groundbreaking People’s Pension research study, New Choices, Big Decisions. In 2015, the research began by following 80 people as they grappled with their initial decisions
under the new pension freedoms. This landmark shift gave savers more control over their retirement savings.
The introduction of auto-enrolment in 2012 is widely regarded as a huge success. Participation has doubled over the course of about nine years. More than 22 million people are now saving into a workplace pension as of 2023, over 10 million more than in 2012. Its success lies in simplicity and behavioural design, nudging people into saving without requiring active decision-making.
Three years later, Pension Freedoms were introduced. The removal of the requirement to purchase an annuity gave individuals greater flexibility, but also introduced more complexity. While the freedom to choose was welcomed, most savers were (and still are) ill equipped to make informed decisions about the best way to access their retirement savings. The result has often been confusion, inertia and a tendency to prioritise short-term needs over long-term financial security.
Tracking real behaviour: what the study reveals
New Choices, Big Decisions was designed to understand not just what people do at retirement, but why. The original cohort — aged 55 to 70 and without defined benefit pensions — shared their experiences, emotions and decision-making hurdles. Today, the study continues with both the original participants and a new cohort, allowing us to compare behaviours across generations.
The findings have remained remarkably consistent. Many individuals feel overwhelmed by their retirement choices. The lure of tax-free cash remains strong, often leading to early withdrawals while deferring more complex decisions. Short-term thinking and loss aversion dominate, even a decade on.
One particularly revealing insight is where people are turning for information. Increasingly, retirees are joining social media communities — especially on platforms like Facebook — to learn from their peers. While they recognise that the information may not always be accurate, it is accessible, relatable and engaging. This stands in stark contrast to the pensions industry effort, which is often seen as opaque and difficult to understand.
Designing for real people, not idealised consumers
The upcoming Pension Schemes Bill presents a once-in-a-generation opportunity to rethink how retirement support is delivered. The lesson from auto-enrolment is clear: simplicity works. Yet, the industry continues to design for theoretical and idealised consumers with perfect knowledge and rational behaviour.
Our research shows that most people want to access their tax-free cash — and then need help. They don’t want endless options; they want guidance, support and the confidence to make informed decisions. We must move beyond engagement as a silver bullet. Instead, we need to focus on delivering timely, relevant information and default solutions that reflect how people actually behave.
We are entering a new phase in pensions, one where default decumulation will play a central role. Solutions are emerging that rightly prioritise simplicity, support and better outcomes. Every year, our research reinforces the same message: engagement alone is not enough. Stronger interventions are needed.
If we are serious about helping members achieve better retirements, we must reset the industry in favour of simplicity. By designing systems and communications that reflect real-world behaviour and needs, we can better support individuals in making informed decisions about their future.
We look forward to publishing the latest chapter of New Choices, Big Decisions on our website in November.
