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Defined Capability

Pensions, financial capability and decision making by retirees

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Published: March 2015


This report describes the results of research into the characteristics and financial capability of individuals in Britain above or just below retirement age who have ‘Defined Contribution’ (DC) pension savings.

The principal driver for the study was the UK government’s announcement in Budget 2014 of a change in the taxation of DC pension savings - removing the obligation for individuals to convert DC savings into a secure pension income at retirement.


Financial disengagement among older people

  • levels of financial disengagement rise steadily as people age;
  • only one in three workers retiring with DC pension savings keep an eye on inflation;
  • one in four keep an eye on the stock market;
  • and only 15% keep an eye on financial best-buy tables

Lack of experience with financial products among retirees

  • one quarter of workers retiring with DC pension savings do not have a savings account or ISA;
  • and only 15% have an investment product

Even lower financial engagement among low-income DC retirees

  • 34% don’t have a savings account or an ISA;
  • 57% have not purchased any financial products during the previous two years;
  • and among those that had, one quarter (24%) reported not being influenced by any information or advice sources


This study comprises secondary analysis of data from Wave 3 of the Wealth and Assets Survey (WAS), which covers the period 2010-2012. WAS is a nationally representative survey of the economic wellbeing of households in Great Britain, funded by a range of government departments.