3 The need for more planning and guidance

**Despite the last few years of economic uncertainty, many people still don’t plan for their retirement.**

The positives of making a plan

Through our research last year, we were able to clearly show how the act of planning can make a huge difference to people’s retirement outcomes.

This picture hasn’t changed. Indeed, we can still see that those who plan will generally feel better about their finances – and enjoy a better life-after-work experience.

And while those who put a great deal of thinking into their plans for retirement are likely to have the most positive outlook, even those who take smaller steps will feel better than those who do nothing.

The benefits of planning are open to everyone

Our findings reveal that planning delivers positive results across all levels of wealth.

For example, 93% of planners on low incomes would say they’re enjoying their retirement – that’s compared to just 66% of non-planners on low incomes.

Not only that, but low-income planners^* are three times more likely to feel very comfortable with the amount of savings they have compared to low-income non-planners (49% vs. 16%).

They’re also more than twice as likely to say they feel positive about their current financial situation (50% vs. 19%).

*People who fall into the ‘low income’ bracket have a yearly personal income of £20k or less.

Despite the benefits, most people still don’t plan for their retirement

Our research shows that when it comes to retirement planning, the vast majority of people (72%) are still doing little, if anything.

This is despite the fact that the cost of living crisis is forcing more people to pay closer attention to their finances.

If we want to get more people thinking about how they can best achieve their retirement goals, we need to understand what the barriers are to making a plan, so we can ultimately work to remove them.

More than a quarter of people (28%) never review their long-term finances

A significant portion of the population (28%) admit that they never check their long-term financial situation. This could be because people think it’s too much effort to do so (10%) or that they don’t know where to start (18%).

Perhaps unsurprisingly, non-planners are the least likely to look at their finances. However, the non-advised, women and those with lower levels of household income are also less likely to consider their financial outlook.

The number of people who check their finances at least once a year has also dropped since our last retirement study (46% down to 42%).

People have large gaps in their pensions knowledge – and feel overwhelmed by information

If we’re to help people make good financial decisions, it’s clear that more education and support is needed.

Indeed, our research shows that the majority of people don't feel confident in their ability to make a good decision when it comes to some of the pension basics. This includes understanding exactly what they have, and how they can best manage it.

At the same time, lots of people (44%) think it's easy to find information and guidance to help with their retirement planning.

Unfortunately, half the population (50%) think the information they come across is overwhelming – and a significant number (41%) don't know what to do with it all.

There's a disconnect between retirement aspirations vs. reality

Across all the different age brackets we spoke to, we found there’s a clear difference between the age people want to retire and the age they think they’ll actually be able to.

While this may not be entirely surprising, the gap is far more pronounced with younger age groups. Indeed, there’s a 10-year difference in the retirement aspirations and expectations of those aged 25-34, but just three years between those aged 55-64.

This could perhaps suggest that the early hopes people carry for their retirement are unrealistic and, as time goes by, reality begins to set in.

Action is needed to combat the rising guidance gap

The cost of living crisis has forced its way into most homes across the UK.

Many people will be facing difficult financial decisions on their own – and some of these could have far-reaching implications on their quality of life. Not just in the here and now, but also in retirement.

We know there’s already a significant guidance gap in the UK. But the current economic uncertainty has perhaps accelerated the need to dramatically upscale the awareness, availability and accessibility of good financial guidance services.