Most defined benefit (DB) pension members feel confident about their pension, but that confidence weakens sharply during periods of change such as buyout, according to new research from Standard Life.
The insurer’s latest DB Member Insights Report found that 86% of DB members said they felt confident about their pension, trust it is secure, understand broadly how it works, and expect it to deliver without surprises.
However, this confidence is largely based on general trust in the pension system rather than a detailed understanding of their scheme or benefits.
The research, based on a survey of 1,000 DB members across the UK, as well as in-depth interviews, showed that confidence dropped significantly when schemes move towards buyout with an insurer.
“Schemes must be mindful of the communications challenge posed by a move to buyout and the need for reassurance.”
Claire Altman, Standard Life
While overall confidence is high, 92% of members said they would have some concerns if their scheme moved to buyout, largely due to uncertainty over who would be responsible for their benefits and whether their retirement plans would remain on track.
Comfort levels also varied sharply by age, the research showed. Only 28% of members aged over 55 said they felt comfortable during times of change, compared with 77% of those aged 25 to 34, suggesting communications become more critical as members approach retirement.
Alongside reassurance, members were also looking for more practical support, Standard Life reported. When asked what would help most in managing their DB pension, 45% cited access to a helpdesk or live chat, followed by one-to-one advice at 41% and easy-to-use digital tools such as calculators at 39%.
Claire Altman, managing director for pension risk transfer and individual retirement at Standard Life, said that while funding pressures have eased for many schemes, buyout presented a fresh communications challenge.
“Schemes must be mindful of the communications challenge posed by a move to buyout and the need for reassurance,” she said, adding that members needed clarity that their benefits are protected by insurers’ capital requirements.
Mark Fenlon, director of client services at Standard Life, added: “The answer isn’t more paperwork, but practical solutions that make pensions easier to navigate.”
