- In the period July 2014 to June 2016, of all adults questioned, 40% believed employer pension schemes were the safest way to save for retirement, broadly similar to 2012 to 2014 (39%), though an increase on 2010 to 2012 (35%).
- 46% considered that property would make the most of their money in 2014 to 2016, an increase on 2012 to 2014 when this figure was 43%.
- Almost a third (32%) of those who expected occupational or personal pensions to provide income in retirement were not currently contributing to a pension with almost half of them (46%) reporting “low income, not being in work or still in education” as the reason.
- Over half (51%) of adults questioned in July 2014 to June 2016 were confident that their retirement income would give them the standard of living they hope for, a figure that has increased from 41% in July 2012 to June 2014.
- In July 2014 to June 2016, the percentage of adults who were able to keep up with bills and credit commitments without any difficulty increased to 59%, from 52% in 2012 to 2014.
- The percentage of adults who did not consider their non-mortgage debt to be a problem at all increased from 66% in July 2012 to June 2014 to 70% in July 2014 to June 2016.
The Wealth and Assets Survey (WAS) is a longitudinal survey carried out by the Office for National Statistics (ONS), which aims to address gaps identified in data about the economic well-being of households in Great Britain. It gathers information on, among others: level of assets, savings and debt; saving for retirement; how wealth is distributed among households or individuals; and factors that affect financial planning.
Respondents are questioned every 2 years with each 2-year period forming a “wave”. Wave 1 covered the period July 2006 to June 2008, with subsequent waves carrying on continuously from this date. Wave 5 of the survey covers the period July 2014 to June 2016. The survey is currently in its sixth wave of interviewing.
The main results from wave 5 will be published around December 2017. This publication is intended to provide more timely metrics and add value before the main delivery of data.
Early indicators are derived from simple frequency counts of variables included in the questionnaire. They are produced before any imputation is carried out. Imputation is crucial to the estimation of wealth measures, therefore, at present, measures of wealth will not be provided. The questions best suited to be used as early indicators are “opinion” questions or those relating to “ownership” of a particular asset. The set of indicators included in this release is not fixed and will be varied over time, taking into account the views and priorities of main users.
Unless otherwise stated, questions were asked of all non-proxy eligible adults (those aged 16 or over and not in full-time education who responded in person to the questionnaire).
Full weighting of respondents has been applied to the data in this release to take account of the varying sampling probabilities and attrition between waves. For waves 4 (July 2012 to June 2014) and 5 (July 2014 to June 2016), the non-proxy respondents have been grossed up to recognised population totals. For wave 3 (July 2010 to June 2012), the weighting grossed all respondents, including proxies, to recognised population totals. While this makes relatively little difference to the percentages in each category, it impacts on the weighted frequencies in the accompanying data tables.
No significance testing has been carried out on these data.
Additional tables and data
The data tables accompanying this release contain some more detailed estimates, including quarterly time series and cumulative data, as well as the weighted frequencies of each of the relevant categories.Back to table of contents
Sources of savings for retirement
There are a variety of ways in which people can save for their retirement including pension schemes, savings accounts, investment in property and other investments. Wealth and Assets Survey respondents aged under 40 or 40 and over and not retired are asked to choose one option from a list of possible options to identify the one they consider to be the safest way to save for retirement (see Annex 1 for full details of the questions and answer options). In a separate question, they are also asked to select from the same list, the one option which they consider will make the most of their money.
In the period July 2014 to June 2016, employer pension schemes were considered to be the safest way to save for retirement with 40% identifying this as the safest way, compared with 29% for property, the next most popular option (Figure 1). These have been the top 2 options since July 2010, though with the percentage of individuals choosing these options increasing over time. While for property the percentage of people holding this opinion has increased consistently, for employer pension schemes there was a sharp increase in people holding this opinion between July 2010 to June 2012 and July 2012 to June 2014, from 35% to 39%, but this has remained broadly similar since then. Stocks and shares and premium bonds were considered the safest options by the fewest number of people.
When considering which method of saving will make the most of an individual’s money, property was the most popular option, chosen by 46% of the population in July 2014 to June 2016, compared with 24% for employer pension schemes (Figure 2), the second most popular option. Over the last 6 years, as with opinions over the safest way to save for retirement, the percentage of people identifying property as making the most of their money has been increasing, which may reflect a growing confidence in property prices since July 2010. In contrast, the popularity of ISAs and savings accounts has been decreasing, possibly reflecting low interest rates over this period affecting people’s attitudes towards these types of investments.
Figure 3 shows the top 5 expected sources of income in retirement. Respondents who have not yet retired were asked to select all the sources they expect to provide income in their retirement from a list of 15 options. The State Pension has been the top option consistently since July 2010 with a broadly similar percentage of respondents selecting this option throughout the period.
The next most popular option was occupational or personal pensions. Although 62% of respondents in July 2014 to June 2016 expected occupational or personal pensions to provide money for their retirement, almost a third of these (32%) were not currently contributing to a pension. It is therefore important to understand people’s reasons for not contributing to a pension and whether these are changing.
Respondents aged under 60, not in receipt of a pension and not currently contributing to a pension were asked to select all their reasons from a list of 15 possible reasons for not contributing to a pension. Between July 2014 and June 2016, the most frequently reported reason was “low income or not working or still in education” with 50% of respondents selecting this option (Figure 4). Although this has been the most frequently chosen reason since July 2010, the percentage of people choosing this option has been increasing over the period.
In contrast, in July 2014 to June 2016 there was a decline in the percentage of people reporting that they can’t afford to contribute to a pension, 30% down from 33% in July 2010 to June 2012. There has also been a decline in the percentage of people identifying “not interested, not thought about it or got round to it” as a reason, from 10% in July 2010 to June 2012 to 7% in July 2014 to June 2016.
When considering just those respondents to this question who expect occupational or personal pensions to provide income in their retirement in July 2014 to June 2016, the top 5 reasons for not contributing are similar (Figure 4.1). In this case, while the top 2 reasons are the same, the third most commonly selected option by those expecting occupational or personal pensions to provide income in their retirement was that they are “not eligible or employer doesn’t offer it”, with 12% of these respondents selecting this option compared with 8% for all respondents to this question.
In 2012, the government introduced major workplace pension reforms, known as automatic enrolment, to encourage more people to save for their retirement. This means that eligible employees are automatically enrolled into an employer pension scheme. The changes in the reported reasons for not contributing to a pension may have been affected by these reforms.
A recent Department for Work and Pensions publication, Automatic Enrolment evaluation report 2016 reports an increase in the number of UK employees participating in a workplace pension between the introduction of the reforms in 2012 and 2015. This means that people are more likely to be contributing to a pension in July 2014 to June 2016 than they were before this. As those who have started a pension between successive periods are then excluded from the data, the composition of the remaining sample changes. As a result, the number who are not eligible for automatic enrolment, due to low income, not being in work or being in education, is likely to increase as a percentage of the lower number not in a pension scheme.
Expectations of retirement
The Wealth and Assets Survey includes a number of questions relating to expectations of retirement, specifically the expected age of retirement, the expected duration of retirement and the level of confidence in the standard of living that will be afforded by retirement income.
Expected age of retirement
In July 2014 to June 2016, a majority of those currently in work or not retired and intending to work in the future (57%) expected to retire between ages 65 and 69 (Figure 5). This has been the most commonly reported expected age of retirement since July 2010. There was a sharp decline in the percentage of people expecting to retire between 60 and 64 between July 2010 to June 2012 and July 2012 to June 2014, from 27% to 21%, accompanied by increases in percentages expecting to retire in the older age groups. Since then expectations have remained fairly stable.
In July 2014 to June 2016, most people aged between 40 and 64 expected to retire when they are aged between 65 and 69 (Figure 5.1). The results for the 65 and over age group reflect the fact that these respondents are already aged 65 or over and are currently in work or not retired and intending to work in the future. Combined with a smaller number of applicable respondents in this age group compared with the other age groups, this gives rise to a different pattern of expected age of retirement. Of all those aged 65 or over, 40% expected to retire aged 70 to 74 and a further 32% expected to work until aged 75 or more.
In general, men expected to retire later than women, with 76% of men expecting to retire over the age of 64 in July 2014 to June 2016 compared with 68% of women (Figure 5.2). Similarly a higher percentage of women expected to retire between 60 and 64 (24%) than men (18%).
When looking at responses by region (Figure 5.3), Wales had the highest percentage expecting to retire aged 70 or over (18%) followed by London and the South West, both with 17%. Scotland had the lowest percentage in this category with 11%.
In July 2014 to June 2016, of those aged under 40 or those aged 40 and over and not retired, 29% had thought about how many years of retirement they might need to fund, a percentage that has remained almost constant since July 2010. As might be expected, the percentage who have thought about this increases as age increases up to age 65 (Figure 6). While only 9% of those aged 16 to 24 reported that they had thought about it, 38% of those aged 55 to 64 reported that they had.
Of respondents who have thought about how many years of retirement they might need to fund, 38% expected to be retired for between 20 and 24 years in July 2014 to June 2016, a percentage that has remained broadly similar since July 2010 (Figure 7).
Standard of living in retirement
Among men aged under 65 and women aged under 60, in July 2014 to June 2016 confidence that their income in retirement will provide the standard of living that they hope for increased sharply (Figure 8). In this period, 51% reported being fairly or very confident, compared with a figure of 41% in 2012 to 2014 and 40% in 2010 to 2012.
When this is broken down by age group (Figure 8.1), 55 to 64 year olds were the most confident, while 16 to 24 year olds were the least confident. In this youngest age group 19% reported being “not confident at all” compared with 15% or less for the other age groups.
Considering the level of confidence by sex (Figure 8.2), men were more confident than women. In the period July 2014 to June 2016, 56% of men were very or fairly confident compared with 46% of women.
Understanding of pensions
With the introduction of major pension reforms in recent years, the survey collects a number of questions to assess respondents’ level of understanding of pensions and the reforms and to gauge the extent to which external factors influence respondents’ decisions on pensions, savings or investments. These can help determine if the current amount and type of information provided is effective.
In the period July 2014 to June 2016, less than half (46%) of adults aged under 40 or those aged 40 and over and not retired agreed (strongly or tended to agree) that they knew enough about pensions to make decisions about saving for retirement (Figure 9). This is broadly similar to those in the period July 2012 to June 2014 (47%), but an increase since July 2010 to June 2012 when only 43% were in these categories.
In order to give an indication of the public’s awareness of the workplace pension reforms, a question was introduced in 2012 to assess how much people felt they knew about them.
In July 2014 to June 2016, of all those in employment, 66% reported at least some knowledge of the workplace pension reforms or automatic enrolment, although only 27% knew more than a little about them (Figure 10). A further 9% reported that they hadn’t heard of them.
The percentage of adults who report that their decisions on pensions, savings or investments have been influenced by anything in the wider world has declined over the period since July 2010, from 24% to only 15% in July 2014 to June 2016, with the biggest change occurring between July 2010 to June 2012 and July 2012 to June 2014 (Figure 11). This may reflect the timing of the economic recession.
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In the period July 2014 to June 2016, of all adults, 59% reported that they were able to keep up with bills and credit commitments without any difficulty, an increase from 52% in July 2010 to June 2012 (Figure 12).
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There has been a decline in the proportion of adults in debt on bank accounts, credit or store cards, mail order catalogues, hire purchase agreements or loans or those falling behind with bills who feel that their debt is a burden in the period July 2014 to June 2016 (Figure 13). Just over a third of respondents (34%) in the period July 2010 to June 2012 felt it was either a heavy burden or somewhat of a burden, compared with 30% in the period July 2014 to June 2016.
In July 2014 to June 2016, only 4% of people with non-mortgage debt or behind with bills had sought help and advice because of their debt, a percentage that has remained broadly similar throughout the period since July 2010.
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The Wealth and Assets Survey Quality and Methodology Information document contains important information on:
- the strengths and limitations of the data and how it compares with related data
- users and uses of the data
- how the output was created
- the quality of the output including the accuracy of the data
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