Planning and Preparing for Later Life

About the study

Planning and Preparing for Later Life is a nationally representative online survey of 4,036 adults aged 40 to 75 in Great Britain commissioned by the Department for Work and Pensions.

The survey aimed to provide up to date information on people’s attitudes and behaviours around planning for retirement. It set out to understand attitudes and behaviours around pension saving and planning for later life, provide evidence to support policy development around income adequacy in retirement, gather evidence on attitudes and knowledge around the State Pension age and finally, to gather evidence on the value consumers place on DWP products, policies and services.

The 2024 survey was the second in the survey series. It provides an opportunity to understand more about how people prepare for retirement and how this process may have been affected by changes to economic circumstances and pensions policy since the first wave of data collection in 2020/21.

Findings

• The later life landscape: 24% of 40 to 75 year olds were fully retired and 10% were semi-retired. From the age of 65, there was a sharp increase in the proportion of people who said they were fully retired (66% of people aged 65 to 69). Overall, 60% of people 40 to 75 in paid work said they wanted to work less as they approached retirement. When asked what would help them keep working longer, 46% of people who had not yet retired from paid work mentioned working fewer hours or being able to take more holidays.
• Expectations for retirement: Around two-thirds (65%) of people below State Pension age said the amount of State Pension they receive would be very important or important in their decision on when to retire. The median ideal retirement age for 40 to 75 year olds who had not yet retired was 60. However, the median expected retirement age was 66, with 72% of people who had not yet retired expecting to retire later than their ideal age.
• Planning for retirement: People were most likely to say they started saving for their retirement in their 20s or 30s with 59% having done so. People started actively planning for their retirement at a later age. 45% of people who were semi-retired and 40% of people who were fully retired started planning in their 50s, with only 22% of semi-retired people (21% fully retired) starting earlier.
• Income adequacy in retirement: While 41% of people aged 40 to 75 said they ’had no idea’ how much income they would need in retirement, 33% of people who had some idea of their income needs and who had not yet fully retired from paid work said they would need a higher proportion of their current income in retirement than they expected to have.
• Pension decision making: 53% of people aged 40 to 75 wanted their pension to provide them with a guaranteed income for life. This compares with 31% who wanted a flexible income and 12% who wanted a flexible income up to a certain age and then a guaranteed income thereafter. Younger age groups and people with smaller pension savings were the most likely to want a guaranteed income for life.

Methodology

The Planning and Preparing for Later Life survey collected data from a nationally representative sample of 4,036 adults aged 40 to 75 in Great Britain. Data were collected via a 45 minute online self-completion survey (with the option to complete via the telephone on request) between 30th October and 7th December 2024.

The sample for the survey was drawn from respondents to the 2022-23 and 2023-24 Family Resources Surveys aged 40 to 75 who had agreed to be contacted for further research. The sample consisted of all 40 to 75 year olds who were sampled for FRS 2023-24 between April and September 2023 as well as a random sample of respondents aged 40 to 75 who responded to FRS 2022-23. A total sample of 14,069 individuals was invited to complete the survey. Responses were received from 4,036 individuals, 29% of the issued sample.

The data have been weighted to ensure that findings can be generalised to the population of 40 to 75 year olds in Great Britain. The final data have been calibrated against ONS mid-year population estimates and Labour Force Survey estimates to ensure that they closely resembled the target population in terms of sex, age and region.

Willingness to pay research

As well as the main survey report, the 2024 study involved research around people’s willingness to pay for pension products and services, conducted with WPI Economics.

The government has launched – or is preparing to launch – a range of different products and services to assist people in making well informed and timely decisions about how to access their pension. The Department for Work and Pensions (DWP) is keen to understand more about how much people value these different pension products and services.

Willingness to pay methods provide a way to ascertain the value placed on goods and services for which there is not currently a market value (such as government services provided free at the point of use or possible future services). Instead, people are asked how much they would be willing to pay to ensure that a product or service was provided. Two different approaches – dichotomous choice and payment card approaches – were used to ascertain willingness to pay for six pension products and services including Pension Wise, simple annual benefit statements and consolidating small pension pots.