Over-55s spend more time choosing a car than making pension decision

People who are approaching retirement spend more time buying a car than deciding how to use their pension savings, according to research by Legal & General.

The financial services firm’s Price of Freedom report found that just under a third (32%) of people aged over 55 take less than a week considering which products represent good value and making a decision on their pension income arrangements.

By contrast, 40% of over-55s said they would spend more than a week choosing a new car.

Legal & General said that its survey of more than 2,000 over-55s highlighted a lack of knowledge about how individuals can use their pension pots in retirement, and underlined the need for better consumer education. For instance, few respondents knew the actual rate of return they could get from their pension as income in retirement, and nearly a quarter (23%) were unable to say what rate would represent good value for money on their investments or savings.

What’s more, even though more than half of respondents (52%) see financial security as their top priority in retirement, nearly three in five (58%) have not yet started researching their options.

Emma Byron, managing director of Retail Retirement Income at Legal & General Retail Retirement, commented: “The flipside of the flexibility offered by pension reform, is that we are all now responsible for making sure our pension pots will last through our retirement. But, as a nation, we are not spending enough time thinking about this, and about how we want to use our pension. This is true both before, and in, retirement.

“Planning retirement is a challenge and it’s maybe not as much fun as buying a car or remodelling our bathroom, but it is important. We need to spend time on this vital task, or we run the risk of not having enough money to last or our investments not giving us the return we want.”