Pension Decision-Making in the New Retirement Landscape: Understanding and improving outcomes for consumers

Project lead: Dr Louise Overton

The study aims to gain an in-depth understanding of the decisions people make about their defined contribution (DC) pensions. A DC pension is a pot of money built up over time, usually from a mix of employee and employer contributions. 

Unlike Defined Benefit (DB) schemes, DC pensions do not promise a specific income. Instead, the amount an individual eventually gets depends largely on the amount they pay in and the choices they make at retirement. Defined contribution savings are becoming an increasingly important aspect of overall retirement income for many individuals.

In 2015 the Government introduced several new options for what people can do with DC pension savings once they turn 55. This includes leaving it invested, withdrawing it as a cash lump sum, or purchasing an annuity. Despite these changes, there is still limited understanding of how people make decisions regarding their DC pension and whether existing support provides adequate protection.

This one-year qualitative project - funded by abrdn Financial Fairness Trust - seeks to shed light on these issues. It will do this by generating knowledge about:

  • The decisions people make about decumulating their DC pension savings after they turn 55, and how they make these decisions.
  • How people can be supported to make the best decisions.
  • What other mechanisms and strategies could help improve outcomes.

The project’s sample is focused on those who fall into the small to medium DC pension pot category, because financial well-being concerns are greater for people who have modest pension pots. Fieldwork consists of approximately fifty qualitative interviews and two focus groups.

Research objectives

  • Develop greater insights into decision-making experiences following recent changes to pensions legislation.
  • Investigate the effectiveness of current consumer protection strategies.
  • Make recommendations for improving consumer outcomes.
  • Engage in broader academic debates regarding the suitability of the ‘advice paradigm’ (O’Mahony and Overton 2014) in protecting individuals from risks to their financial wellbeing.

Research team

Dr Louise Overton, Lecturer in Social Policy and Director of CHASM

Dr Christopher Q Smith, Research Fellow 

Partners and sponsors

The project is funded by abrdn Financial Fairness Trust, an independent charitable foundation which aims to improve financial wellbeing in the UK.

We are also grateful to have the ongoing input of several stakeholders from across the pensions industry and related sectors.

abrdn Financial Fairness Trust logo


Outputs and impact

The project’s engagement and influencing strategy has three core aims:

  • To inform policy makers and professionals of the risks and challenges facing those with DC savings in the new pension landscape, using in-depth qualitative data.
  • To inform the development and delivery of the most effective ways to help consumers obtain and process the information necessary to make informed pension decisions.
  • To inform the development of other necessary interventions (beyond information and advice) that will protect consumers from poor retirement outcomes.

These aims will be met through a variety of engagement activities, including stakeholder workshops, a launch event for the final report (involving representatives from across the financial services industry), conference papers, academic outputs, media engagement, and social media.

View the Project Report