The Department for Work and Pensions (DWP) have been surveying 40–75 year olds, to find out people in the UK’s understanding of their pensions and retirement.

The DWP has recently released the results of its second ‘Planning and Preparing for Later Life’ survey, based on questions posed to over 4,000 people aged between 40 and 75.

The answers showed some conflicted – or perhaps just wishful – thinking. For example:

State pension

Around two-thirds of people below State pension age (SPA) said the amount of State pension they receive would be very important/important in their decision on when to retire. That supports the findings of other research. For example, in 2023, the Institute for Fiscal Studies found that on average, the State pension (currently £230.25 a week) made up 44% of income for households aged 66–70 and 71% for the poorest fifth of that group.

Nevertheless, the DWP survey showed that 44% of people expected to retire before their State Pension Age (currently 66, rising to 67 by April 2028). In terms of an ‘ideal retirement age’, those who had not yet retired settled on a median age of 60. Anyone retiring at that age now will be left with a seven-year State pension gap of over £83,000 (plus triple lock increases) to fill.

Planning for retirement

Despite the ideal retirement age of 60, the pattern of saving for retirement suggested that other goals had a higher financial priority. Only 59% said they started saving for their retirement in their 20’s or 30’s. What the DWP described as “actively planning” for retirement began at a later age. 45% of people who were semi-retired and 40% of those fully retired did not start active planning until their 50’s. Only about one-in-five of semi-retired and fully retired people entered the active planning phase earlier in life.

Income adequacy

41% of people said they ‘had no idea’ how much income they would need in retirement. Yet when asked how confident they felt about their pension decisions on a scale of 1 to 10, the same people gave themselves an average score of 5.1, with only about one-in-eight owning up to a lack of confidence.

If some of those conflicting responses resonate with you, one other finding of the survey is worth noting: people with a private pension who had used regulated advice or guidance in the last 12 months felt more confident making decisions about pensions.

Professional advice from an independent Financial Adviser could be a solution to any false confidence that many people face when pension planning. Working with a Financial Adviser is a long-term solution that helps you put in place achievable goals through careful consideration of market forces, tax liabilities and lifestyle changes. All Financial Advisers and Chartered Financial Planners at Shackleton use Cashflow Modelling to help you plan for retirement. This uses complex financial mapping to understand how much you will have to spend based on assets such as pensions and income, and can tell you when you are able to retire with the amount you would need to live comfortably.

 

Article published on the 10th of September 2025.

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