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Mercer worked with research agency REO Digital to explore how people think about accessing their pension in retirement. The research surveyed 381 pension savers aged 45 to 65, focusing on retirement goals and attitudes towards new ways of taking income. The findings suggest that a “pension bank account” could resonate strongly with members, provided it is positioned clearly and answers some very practical questions.
A concept that makes sense to members
The headline finding is encouraging: most people instinctively understand the idea of a pension bank account. When presented with the concept, the majority found it easy to grasp and felt it aligned well with their needs in retirement.
‘Intent to try’ was evident. 86% said they would be likely to try the product, with 10% saying they would be very likely. Respondents were clear about what appealed most: security, competitive returns, instant access and the ability to make flexible withdrawals.
This matters because it points to a simple truth: when pensions are framed in a way that mirrors everyday financial behaviour, checking balances, accessing money, managing income, engagement is likely to improve.
Interestingly, ‘intent to try’ is higher among younger age groups, suggesting the product could also play a role earlier in the retirement journey, not just at the point of decumulation.
But members want clarity, not complexity
While the concept landed well, members were equally clear about what they needed next. Their questions were practical rather than technical: How is this different from a normal bank account? What does it cost? How does it work in practice? And, what rate of return will I get?
These are not structural barriers, but signals that highlight the importance of getting the communications right. This could be addressed through clear, member-focused marketing and simple explanations, rather than simply product design.
What members really want from their pension
Across all age groups, the strongest aspiration is clear: a regular, controlled income that lasts for life. Flexibility matters, but interestingly, that is not the primary goal.
Confidence in managing pensions is middling at best, averaging around 6 out of 10. That lack of confidence demonstrates the need for simplicity and reassurance. Individuals are not looking to become pension experts. They want solutions that reduce decision-making, feel familiar to use and help them feel confident they are doing the right thing. The research shows that brand strength, familiarity, and credibility can also support consumer confidence reducing perceived risk as the product is framed as familiar, trustworthy, and easy to use.
Simplicity is the strategy
“Taken together, the findings point to a clear conclusion: members are not asking for more innovation for its own sake.” Explains Stephen Coates, head of proposition, Mercer Master Trust. “They are asking for pensions that behave more like the financial products they already understand, while still delivering the outcomes they care about most.
“A pension bank account could tap directly into that desire, but only if it is positioned correctly. Decumulation does not need to be overly complicated, at least not for the member. In fact, the more it resembles everyday money management, without sacrificing security or returns, the more comfortable members are likely to feel. Aligning pensions to the familiar helps people understand – pension = saving, bank = spending. It’s certainly the approach we are taking as we look to develop our default retirement solutions for the Mercer Master Trust.”
With members attitudes towards pensions often shaped by feelings of detachment, complacency, or even apprehension,1 products that feel familiar, controllable and trustworthy may prove to be the most powerful ways to improve engagement and outcomes in retirement.
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1 Understanding member engagement with workplace pensions – GOV.UK
