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New research by The People’s Pension and State Street Global Advisers looks at how your personality could affect your income in retirement
Your personality type could have a major impact on how you use your retirement savings – and could lead to you running out of money much earlier than you expect.
That’s according to the findings of some new research carried out for The People’s Pension and State Street Global Advisers (SSGA). The research, carried out by Ignition House, tracked 80 people over an eight month period.
The study identifies seven distinct personality types amongst savers accessing their pension pots under the new pension freedoms introduced earlier this year. The report, Pensions Personalities: New Choices, Big decisions, outlines those personality types, and argues that three in particular are at unacceptably high risk of poor long term outcomes.
It calls for the industry to consider how best to support these types of pension savers in their decision making to try and avoid people running out of money in retirement.
Nigel Aston, Head of European Defined Contribution at SSGA, commented:
“By understanding the lens through which retirees see the world, their goals and pain points, we can start to design the defaults to help those approaching or in retirement make the most of their money under the new freedoms. For some, their current approach runs the risk of leading to a poor long term outcome. Better communications, less confusing terminology and well-governed default solutions can help to improve outcomes.”
Darren Philp, Director of Policy and Market Engagement at The People’s Pension, added:
“There is a real risk that some of our pension personality types might run out of money really early on, which could lead to problems later in their retirement. People don’t always realise how long their savings might have to last them, which is especially worrying given that a lot of people retiring today will live into their nineties. We hope that this research will help the industry communicate better and devise defaults, guidance and advice solutions which give all savers – however bemused they may be by their options – the chance to achieve the best possible retirement.”
To find out more, and whether you’re an I Can Do Better Colin or a By To Let Barbara, read the full report here.