Pensions industry must encourage greater support and guidance in the lead up to first withdrawal, urges Fidelity International

by | Mar 31, 2022

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Almost three-quarters (71%) of Fidelity pension scheme members access their tax-free cash before their selected or default retirement age, highlighting the need for greater support and guidance in the lead up to the first withdrawal, according to a new report by Fidelity International.

The Stepping into Retirement report highlights how member engagement and confidence soars during and after crystallisation. Almost three-quarters (74%) of Fidelity members who have accessed some of their pension have a high or medium level of engagement, compared with 30% across its member base as a whole.

Deciding to make the first withdrawal from a pension pot is, unsurprisingly, a key driver for individuals to engage with their pension savings. Yet more needs to be done to build their confidence at an earlier stage. Fidelity’s survey into a sample of its members, where they were asked to score against five statements related to their finances, found a third (34%) of members aged under-55 achieved a ‘high’ score for general financial confidence. This rises to 51% of over-55s who have not so far withdrawn any money from their pension, and significantly higher to 70% for those who have withdrawn pension savings.

James Carter, Head of Pension Products & Policy, Fidelity International, comments: “Our Stepping into Retirement report highlights the discrepancy between members’ default or selected retirement ages and the actual dates they start to withdraw their money. As an industry, it is clear we need to think about how we can help members at each stage of their retirement journey, building confidence through strong guidance and support in the run up to retirement. We need to further evolve how members are informed and reminded about reviewing their retirement age, so they are confident they are making the right decisions based on their needs when they first withdraw from their pension.”


Fidelity’s report also looked at members who had taken money from their pensions, with 93% remaining with their current investments when moving into drawdown.

Despite overall financial confidence growing through the act of accessing their pensions, a separate research study from Fidelity found that 45% of respondents aged 55-75 felt that retirement planning is too difficult to do themselves. This increases to 61% for those aged 35-54.

James Carter continues: “When it comes to advice, we have a role to play in providing affordable and accessible options, either through traditional or lower-cost digital channels, so that members feel more confident in their retirement choices. In addition, we need to think about how we can better support members after they retire, or after they first withdraw money from their pension.


“Clearer rules around how firms can engage with consumers’ personal circumstances – or even a new regulatory concept enabling ‘personalised guidance’ alongside traditional advice – would enable better engagement. Activities could mature from softer, educational messages about saving, to more personalised messages, such as illustrations of how long each member’s pension savings could last. Fidelity is exploring how to share such messages within the current guidelines in a positive and meaningful way, with proactive steps that will help individuals manage their finances throughout their lives.”

To read Fidelity International’s Stepping into Retirement report in full, visit:

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