1. Keeping you connected to today’s UK financial services market
Welcome to the fourth edition
of viewpoint, Harris Interactive’s
UK financial services newsletter.
In this edition we focus on retirement,
the levels of pension provision people
have made, and how they feel about
their life in later years.
We hope you find this newsletter
informative and useful. If you wish to
find out more about the work we do
within the financial services industry
please get in touch.
Frances Green: Financial Services
Director
On 12th January, the new
Pensions Bill 2011 was introduced
to the House of Lords which will
abolish the default retirement age
and bring forward the increase in
the state pension age.
With the inevitable impact on the
Financial Services market, in this
edition of viewpoint, we examine
the challenges consumers face
getting to grips with the pensions
market, how prepared consumers
are for retirement and what this
means for financial organisations.
Would you pass a moral
character test?
In 1908 the government
introduced the first state pension.
It was a non-contributory scheme
subject to means and 'moral
character' tests. Given the
prejudice of the time I wonder
how many working within our
sector would pass that test today?
Every government since has tried
to make its mark. With an
ever-aging population it has
become increasingly important for
people to provide for their own
retirement rather than have an
over reliance on the state.
How prepared are we?
From our own Harris Poll research,
74% have made some provision for
retirement, either through a
pension, property or other
investments. However 26% have
made no provisions at all and
amongst those under 30, this
increases to over a third.
For more information on our financial services research practice visit:| www.harrisinteractive.co.uk PAGE 1
ISSUE 4 - March 2011
viewpoint
The new
pensions bill
Pages 1-2
Challenges
ahead &
join our RDR
Syndicate
Page 5
Are pensions
passé?
Page 3
Communicating
the benefits
Page 2
Listening to
the public
Page 4
Q: Which, if any, of the following types of pensions,
savings or investments do you currently have to
support you in retirement?
1908 – Old Age Pensions Act
introduced first general old age
pension
1925 – Contributions Pension Act
contributory scheme set up for
manual workers
1946 – National Insurance Act
introduced contributory state
pension for all
1975 – Social Security Pensions Act
set up the State Earnings Related
Pension Scheme (SERPS)
1987 – Employees are able to opt out of
occupational schemes and into
personal pensions
1992 – Maxwell scandal
£460m from group pension
funds used to finance business
dealings
Pensions, savings & investments currently owned to provide support in retirement
Pensions Assets or savings
%ofrespondents
PENSIONS TIMELINE

2. Issue 4 | March 2011
For more information on our financial services research practice visit: www.harrisinteractive.co.uk | PAGE 2
viewpointContinued from page 1...
Q: When thinking about retirement, which words
come to mind to describe how you feel?
With such a reliance on the State
pension it is worrying that few are
aware of the value of this - over a
quarter say that the maximum of
£97.65 per week is less than
expected, so is it any surprise that
many are filled with fear at the
thought of retirement?
So why are so many not preparing
for their retirement? I believe the
sector and the government are
really not helping themselves. The
market clearly is too complex, using
terminology consumers quite simply
do not understand.
There are also a multitude of
different types of pensions:
Contributory, Non Contributory,
Stakeholder, Personal, Defined
Benefit etc. With National
Employment Savings Trusts (NESTs)
joining this mélange from 2012, it is
understandable why consumers are
confused and are not engaging with
schemes designed to support them
in their golden years.
Many people, quite rightly state that
affordability is a major issue, though
I do sympathise with that point of
view, I also feel that the government
and financial organisations have
both failed to communicate the
benefits (emotionally and rationally)
of preparing for retirement and have
helped to create a society of
consumers living for the here and
now. Why should I save? Especially
when the government will provide
for my later life and I’d rather be
tottering around in those new
Jimmy Choo’s (which surely are an
investment in themselves?!)
Communicating the benefits
Those who are confident in their
retirement plans are happier about
their concept of retirement, using
words such as ‘freedom’, ‘free’,
‘relaxed’, and ‘happy’. Personally
as I am writing this, the thought of
1995 – Pensions Act
response to Maxwell, set up
regulatory and compensation
schemes
1999 – Introduction of Minimum
Income Guarantee, income
support for poorest pensioners
2001 – Introduction of stakeholder
pensions
2002 – Switch from SERPS to State
Second Pension
2003 – Introduction of the Pension
Credit, bringing pensioners into
means-testing
2007 – Pensions Act 2007
the creation of the PADA
(Personal Accounts Delivery
Authority)
2010 – PADA announced that NEST
(National Employment Savings
Trust) will be the permanent
name for the personal accounts
scheme
2011 – State pension age for women
to increase to 65
2012 – Workplace pensions reforms
due to come into effect
2020 – State pension age increasing
to 66
2036 – State pension age increasing
to 67
2046 – State pension age increasing
to 68
Those confident in their retirement provision
Compiled from multiple sources:
BBC News
The Pensions Advisory Service
National Employment Saving’s Trust
PENSIONS TIMELINE

3. Issue 4 | March 2011
For more information on our financial services research practice visit: www.harrisinteractive.co.uk | PAGE 3
retirement is nothing but a distant
glimmer. With the unshakeable
January blues, I’d love to take the
eternal holiday in Eastbourne after a
lifetime of hard work with a
well-earned G’n’T.
Realistically though, I know that
after I’d taught myself to crochet, I’d
be looking for something to do... but
that’s not even thinking about how
I’d afford it.
However, the word ‘retirement’ now
instils dread in many with almost
half feeling unconfident about the
amount of provision they have
made. Feelings of worry, being
scared, and uncertainty now enter
the fray, so much so that 31% expect
to have to work out of necessity
when they come to retire.
Inexplicably, despite this clear lack of
preparation almost half of working
people also expect their standard of
living to increase or at least remain
the same when they retire, so how
can we help people plan ahead,
increase confidence and make the
world a happier place?
We do have to remember
retirement planning doesn’t
necessarily mean ‘pensions’. Four in
five hold other savings or assets
such as building society accounts,
their main home and around a
quarter have other investment plans
such as ISAs.
What is evident is the lack of
confidence people have in pensions
themselves. When asked to rate
confidence in providing a
guaranteed source of income for
retirement, property and ISAs rank
higher than a designated pension
scheme, perhaps due to the current
volatile times but also perhaps
because those now planning their
retirement lived through the
pension mis-selling of the 80s
and 90s.
viewpoint
Q: How confident are you that your current retirement provision will provide
you with a large enough income to support you throughout your retirement?
Confidence in current provision to provide support throughout retirement
90%
0%
10%
20%
30%
40%
50%
60%
70%
80%
100%
5
13
27
26
20
9
Don’t know
Very confident
Very unconfident
Fairly unconfident
Neither
Fairly confident
Those not confident in
their retirement provision
Q: When thinking about retirement, which words
come to mind to describe how you feel?

4. Issue 4 | March 2011
For more information on our financial services research practice visit: www.harrisinteractive.co.uk | PAGE 4
Continued on page 5...
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Are pensions passé?
Due to the complexity of the
pensions market, consumers seem
unwilling to invest the time to
understand the market. Employers,
providers and the government need
to do more to promote the benefits
of pensions and explain how
consumers can take more of an
active role managing rather than
opting for the default fund.
Even during these turbulent times
less than half have reviewed their
pension fund in the last 12 months
and just under a quarter have never
reviewed their funds. That doesn’t
mean that Mr General Public can’t
understand, but there is a reliance
on someone else to advise, followed
by a ‘head-in sand’ approach until
the nest-egg incubation period is
over.
Any way to reassure customers they
can understand will encourage
better planning. People may have
more confidence in property or cash
ISAs but that’s simply because they
generally have more interaction and
understanding, they forget about the
tax breaks with pensions as well as
the possible ‘employer’ contribution.
Given what’s happening within the
property market at the minute and
cash ISA levels, are they really the
better investment?
ISAs or property have such appeal to
customers because they want more
flexibility to choose when and how
benefits can be drawn. Whilst the
benefits of such investment-led
schemes are sound in theory,
generally people see savings with a
guaranteed interest as more inviting
and secure at this moment.
The lack of pro-activity also
contributes to non-take up of
company pension schemes. When
starting a new job, feedback
indicates that this is the last thing on
the minds of new employees. NESTs
go some way to resolve this through
auto-enrolment, and a third of the
public agree this is a positive
initiative, but is enforcement really
the answer when it does not
promote a greater understanding?
Interestingly, NEST has recently
published a handy phrase book
which gives the terms that ensure
clarity and encourage take up in
schemes: http://nestpensions.org.uk
/documents/NEST_phrasebook.pdf
This will help instil greater levels of
consumer confidence and provide a
greater understanding, but we still
need to address the confidence in
the industry as a whole.
The introduction of the Retail
Distribution Review will also help to
reassure consumers that financial
advisors aren’t in fact the
devil-incarnate, selling in their own
interest, but people that provide
sound advice. Though, as consumers
struggle to place any intrinsic value
upon the advice they receive, I
suspect the impact on the
consumer’s pocket of paying £670
(the cost of full advice) will deter
those who are less engaged even
further.
Q: Please rank the following ways of investing or saving money in order of the confidence
you have in them to provide you with a guaranteed source of income for your retirement
Confidence in providing guaranteed source of income for retirement
Property
ISAs
Pension schemes
Other savings
Bonds
Stocks and shares
Investments in jewellery
Investments in antiques
1st
2nd
3rd

5. Issue 4 | March 2011
For further information related to this article, such as the background data, or to suggest new topics for
inclusion please email financial@harrisinteractive.net or call +44 (0)161 615 2300
This edition was
researched and writ-
ten by Lynn
Tweedale, Senior
Research Manager,
Financial Services
Research Team.
Continued from page 4...
To share the latest thoughts
and options of financial
services team, visit our pages
at:
www.harrisinteractive.co.uk
Here you will find recent case
studies, visit our blog, post your
comments, download recent
reports, and access the archive
of viewpoint newsletters.
Join our RDR
Investor Syndicate
Harris Interactive invites you to
participate in our new Investor
Syndicate focusing on the Retail
Distribution Review.
The syndicate offers a cost-
effective way of regularly
monitoring investor awareness
and attitudes towards the
changes proposed by the RDR,
likelihood to use advice when
taking out investment
products and with what level
of advice. The next wave will be
taking place in April.
For further details, contact:
Frances Green:
fgreen@harrisinteractive.com or
Michael Worledge:
mworledge@harrisinteractive.com
viewpoint
The yellow brick road forward
So, how can institutions overcome the
challenges and meet needs of
customers in the modern retirement
landscape?
There is always the possibility of using
scare-tactics of ‘what-if’s’. However
painting a picture of ‘freedom’,
‘relaxation’, ‘happy’, ‘excited’ and
perhaps even a G ‘n’T will help people
to get engaged and using simple
terminology to empower them is
undoubtedly the key.
Financial advisors and employers are
the key touch-point for many.
Providers need to ensure that
appropriate marketing support is made
available using clear terminology and
imagery.
Employers also need to ensure they
allow employees the time to talk
through their options with advisors,
helping them to plan on a regular
basis.
Targeting those who currently reside in
the default fund would be a great
start, are they really in the right fund
for them? Are they investing the right
amount given their hope and dreams?
Demonstrating the online tools that
many schemes now have will also help
people to feel empowered.
We do have to remember that
traditional pension schemes aren’t
relevant to everyone, but for many
they are still the right investment
vehicle. With so many seemingly
unable to afford a pension, many are
missing out on the contributions of
their employer as well the associated
tax benefits. The government really
does need to try and change this
living-just-for-today attitude.
But ultimately, for all the encouraging
changes in legislation and
hand-holding through the pensions
maze as with all things financial, we
will need to wait a generation for
customers to reap the benefits of the
changes happening now…
and by then… science may have found
the fountain of eternal youth.