• We're quite keen for our clients to adopt the new active voice of "you said, we are doing" rather than "you said, we did" because it's good to get residents on board, telling them what's in progress but also what you are actively doing in relation to their feedback and inviting further engagement.

At a glance

The purpose of this research was to explore why people are fully withdrawing given pension pots, how they are doing it, and their understanding of alternative options when doing so. Ideally, the decision to withdraw should be well understood by the consumer, with consideration given to their retirement income needs and sources, both now and in the future. However, consumers fully withdrawing a pension pot on a non-advised basis run the risk of making choices detrimental to their long-term financial security. A total of 1,000 telephone interviews were conducted with those who had fully withdrawn their pension pot. The reasons given for withdrawing all pension savings from a given pot were varied, but the primary motivations that came out of our research were a general climate of mistrust and a focus on the present as annuity rates were not regarded as providing good value for money.

About the client

The Financial Conduct Authority (FCA) is the conduct regulator for 59,000 financial services firms and financial markets in the UK and the prudential supervisor for 49,000 firms, setting specific standards for 19,000 firms. Their operational objectives are to:

  • Protect consumers – secure an appropriate degree of protection for consumers
  • Protect financial markets – protect and enhance the integrity of the UK financial system
  • Promote competition – promote effective competition in the interests of consumers

Challenges and objectives

Reforms in pension legislation, introduced in April 2015, increased the number of options available to consumers when they decide to access their pension savings, from the age of 55. One of these being the ability for people to take the entirety of their pension pot as a cash lump sum (or a ‘full withdrawal’).

According to FCA data, since 2015, there have been a substantial number of consumers that have fully withdrawn. Ideally, the decision to withdraw should be well understood by the consumer, with consideration given to their retirement income needs and sources, both now and in the future.

In this context the FCA set out to understand:

  • What consumers who fully withdraw their pension savings are doing with these monies;
  • What their motivations and considerations for fully withdrawing were;
  • What their understanding of the choice to fully withdraw was;
  • What their motivations and understanding of giving up a Guaranteed Annuity Rate (GAR), where relevant, was;
  • What other sources of retirement income they have, other than the withdrawn DC pension pot.
fca pension mistrust


FCA contacted a representative sample of UK pensions providers and requested that they provided files containing contact details for all consumers who had withdrawn a pension pot with them (either in-part or in full) on a non-advised basis between April and June 2016. In total, 61,124 records were supplied to IFF.

Having ensured that all the data files were in the same format we combined into one file and conducted a data cleaning and deduping exercise. The deduplication process sought to ensure that no more than one record was present for each individual and household. Where there were duplications, priority was first given to any that attributed a GAR to the consumer, then to those with the highest pot size; this was due to the comparatively limited sample for such individuals. Following this process, a total of 19,067 records remained. From these useable records, 8,000 contacts were drawn to be representative of the underlying population as shown in FCA data.

IFF conducted two stages of developmental work to inform the design of the research questionnaire. The first stage of the developmental work involved cognitive testing of the questionnaire among the intended target audience for the main survey. This stage was used to test comprehension, relevance and flow of the questions in the survey, as well as the survey length. The subsequent stage consisted of a larger scale CATI pilot of the full questionnaire to assess the performance of the questionnaire under conditions that more closely replicated the main stage of data collection. This stage enabled the assessment of sample quality and incidence of response where the cognitive testing cannot.

A total of 1,000 interviews were completed by Computer Assisted Telephone Interviewing (CATI), from IFF’s London office. In addition, we conducted a qualitative stage of 30 follow-up depth interviews with consumers that had participated in the quantitative stage to explore their survey responses and motivations in more detail.


Our research findings were one of the strands of evidence used to inform the FCA’s Retirement Outcome Review. As a result of the review the FCA introduced new rules and guidance aimed at improving consumer engagement with their retirement income decisions, and promoting competition by making the cost of drawdown products clearer and comparisons easier. The changes to ‘wake-up’ packs, retirement risk warnings and reminders changes, and the annuity information prompt came into force on 1 November 2019.

The published summary report can be found here.

For further information and advice on pensions regulation research, contact Regulation research manager, Rob Warren.

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