How would you feel making decisions about your £100,000 pension?

Imagine you had £100,000 saved in your pension as you approached retirement. What would you do with it?

• Would you continue to add more, so that it grows further?
• Would you take 25% of it as tax-free cash? Pay off a mortgage, or support a family member?
• Would you begin to draw a regular income as you enter retirement?

£75,000 to £100,000 is roughly the average amount someone aged 60 today has saved in their Defined Contribution (DC) pension (FCA, 2025). This sits alongside their wider finances – such as a Defined Benefit pension (if they have one), the State Pension (when they reach State Pension age), and their home if they own it. Many people will also have the finances of their spouse or partner to consider.

Since the introduction of pension freedoms in 2015, people with DC pensions have more choice about how and when to withdraw their pension savings. This provides greater flexibility, but also means people face potentially complex financial decisions. People have to consider a number of different questions such as how long they might live for, how inflation might affect their finances in retirement, and how they might pay for social care later in life, if required.

As the pensions landscape in the UK changes, many more people will have to make decisions about how to use their DC pension savings – also known as ‘decumulation’. Already today, more than half of 55- to 64-year-olds (around 60%) have money saved in a DC pension.

To explore this new reality, the Standard Life Centre for the Future of Retirement commissioned new research: in-depth interviews as well as a new public opinion survey, both with people aged 55 to 70 with at least one DC pension.

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How do people feel about making decisions regarding their pension savings?

Taking the plunge in deciding when and how to take money from your pension isn’t just a financial decision – it's an emotional one.

People experience a wide range of emotions when thinking about pensions and retirement. In our survey, the top five emotions associated with pension decision-making are feeling:

• Hopeful (58%)
• Confident (50%)
• Uncertain (41%)
• Excited (39%)
• Daunted (38%)

People may feel several of these emotions simultaneously, and they may change over time. In our interviews, people reflected on what starting to make these decisions feels like.

Why do women face different retirement planning challenges?

Our survey shows there are some significant differences between how women and men feel about these pension decisions:

• One in two women (49%) say making pension decisions makes them feel “uncertain”, compared to one in three men (35%)
• Similarly, 49% of women say they feel “daunted”, compared to 29% of men

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These differences often relate to structural factors, such as the Gender Pensions Gap, not individual behaviour or differences in ‘financial confidence’. Recent psychological research suggests that It’s Not About Confidence when it comes to gender differences, with systemic, social and situational factors more often shaping future planning.

Why is taking a 25% tax-free lump sum popular?

Our survey shows that, among this age group, taking 25% tax-free cash as a lump sum is a popular way of accessing a DC pension.

• Among those who describe themselves as retired, 60% say they took their full 25% tax-free cash in one lump sum

Flexibility, control and security emerged as key drivers for accessing tax-free cash. Among those who took the full lump sum in one go, the most common reasons for doing so included:

• I wanted to be able to easily access the cash (37%)
• It gave me a greater sense of control over my finances (30%)
• It gave me a greater sense of financial security (30%)
• It marked the start of my retirement journey (26%)

In our qualitative research, interviewees explained they liked the 25% tax-free element of DC pensions because it provides a tangible, immediate reward for their years of saving.

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However, our interviews also revealed what is sometimes called an ‘anchoring effect’, a cognitive bias that causes us to rely heavily on the first piece of information we are given about a topic. People may ‘anchor’ on the 25% tax-free cash figure because it is one of the first pieces of information they encounter about their DC pension at around the age of 55 (the current age at which most people can access their DC pension savings, though this is rising to 57 in 2028). Because of the ‘anchoring effect’, people may not fully consider all the other options available to them.

Why do people want to ‘clear the decks’ before they retire?

Our research shows that many people have a strong desire to simplify their finances as they approach retirement. The most common expression of this is a ‘clear the decks’ attitude – the non-negotiable priority of paying off the mortgage and other debts before retirement. Often this is not for financial gain, but to simplify a confusing landscape and gain a sense of control.

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In our survey, we asked people how they had used their tax-free cash. One in three people (34%) mentioned clearing or reducing debts, or paying off their mortgage, consistent with what people said in our interviews.

In a separate survey question, we asked people who had not yet retired what their financial priorities were before they stopped working. Among homeowners with a mortgage, paying off their mortgage was the top answer by far (65%).

Is retirement a single event or a gradual journey?

Traditionally, for some people, retirement has been more like a single event – working full time with only short periods out of work, and then leaving paid work entirely, perhaps after working for several decades or more for a single employer.

While some people still experience this type of retirement, it is becoming rarer.

In our survey, we found that nearly three in four people (71%) feel that retirement is a ‘gradual journey’ rather than a ‘single event’. Interestingly this idea has widespread appeal: there are only very small variations between different groups, and the idea of a ‘gradual journey’ appealed in a similar way to both current retirees and non-retirees.

In our interviews people liked the idea of ‘stepping stones’ as a metaphor. While anticipating one’s financial needs over 30 years can feel overwhelming, a ‘stepping stones’ approach makes the process feel more manageable, with key milestones like paying off the mortgage or reaching State Pension age marking the path.

Do people want guidance or choice when it comes to decumulation decisions?

There is a live policy debate about how best to support people making decisions about what to do with the money saved in their DC pensions. This is mainly because some people are making these decisions without accessing any formal sources of guidance or advice.

We asked our survey respondents for their views about this:

• A majority of our survey respondents (56%) said they wanted a “mix of guidance and personal choice about my finances in retirement”
• The second most popular option was “I would prefer to make all the decisions myself about my finances in retirement, even if it’s more work” (26%)

In practice, ‘a mix of guidance and personal choice’ likely means different things to different people. What this ‘mix’ could look like will now rightly be the subject of discussion and debate as the concept of Guided Retirement is developed after it was included in the Pension Schemes Act, and as the Second Pensions Commission develops recommendations for their final report, expected in 2027.

The changing landscape of DC pension decumulation

Today, around two in five working-age adults in the UK – nearly 15 million people – are not saving enough to be financially secure in retirement. This includes many people who will be retiring in the 2030s and 2040s.

As people retire with more money saved in DC pensions, the decisions they make will also become increasingly important for whether they have long-term financial security.

As policy makers and industry work on changes to the landscape of DC pension decumulation, it’s important to ensure that the system overall serves people well, reflecting the complexity of our real lives. As well as considering what may be financially ‘optimal’ and helping more people to be financially secure in later life, our research shows that the design of the system also needs to take into account people’s varying hopes and fears about what their ‘stepping stones’ to retirement may look like, and the common desire to simplify finances and ‘clear the decks’ before retiring.

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About the research

The Standard Life Centre for the Future of Retirement commissioned in-depth qualitative research with people aged 55 to 70 to understand more about how they approached making decumulation decisions. In January 2026 we published this research as Decisions in the dark: How the DC pioneer generation are navigating retirement income decisions.

This new spotlight paper summarises some of the findings from our interviews along with new results from a public opinion survey exploring people’s emotions and decisions relating to their DC pensions. The survey was conducted by Opinium in February 2026, with a sample of 2,000 UK adults aged 55 to 70, all of whom have at last one DC pension.

There are varying estimates of the average amount of money people have saved in their DC pensions. We have used the Financial Conduct Authority’s Financial Lives Survey 2024 as our source. This survey’s results suggest that the average (median) individual aged between 55 and 64 with a DC pension in accumulation has between £75,000 and £100,000 in DC pension wealth (FCA, 2025). We also know that median DC pension wealth will grow over time as a result of people approaching retirement having spent more time in employment since 2012 when automatic enrolment was first introduced (IFS, 2025).