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Pension confusion set to leave most doctors unprepared for retirement

Pension confusion set to leave most doctors unprepared for retirement

Doctors are still confused by pensions, with three quarters (77%) not understanding their key features, or how much to save each month, according to new research by Wesleyan, the specialist financial mutual.

More than one in five (21%) incorrectly believe they can withdraw their full pension fund, tax free, at any time, while the amount they believe they will need each year in retirement has fallen by more than£16,000 from £48,243* in 2014 to £32,037 in 2016.

Vicki Wentworth, Chief Customer and Strategy Officer at Wesleyan, said: "It is very hard for a busy doctor, with all the pressures that come with the job, to free up the time to frequently review their plans for retirement.

"As a result, there is clearly still some confusion around what pensions are there to do and how they can help you plan for the future, but proper planning is essential to help us enjoy the standard of living we dream of in retirement."

According to the findings, nine-out-of-ten doctors (91%) have researched into their pensions in the past year, yet despite this most are unclear about what lies ahead.

The research also found that 69% doctors are unaware how much the government contributes for every pound invested in a pension.

While they may not apply to all doctors, 69% don't understand the pension freedom reforms put in place last spring despite the extensive publicity surrounding their introduction more than a year ago.

Overall, a fifth (21%) of doctors incorrectly believe the reforms mean people can withdraw their full pension fund at any time, completely tax free. More than a quarter (26%) believe it is only possible to take a sum from a defined contribution pension after retirement.

Vicki added: "It is hard to plan for retirement if you don't fully understand the options available to you and what you can actually do with your savings - our research shows most doctors sadly don't understand.

"How much doctors need in retirement depends on their own circumstances and needs, but what is clear is that many have an idea of what they would like to have after they finish work, but don't understand enough about pensions to make effective plans to achieve it.

"Given the amount of publicity that has surrounded pensions during the past year, we would expect to see doctors begin to plan earlier for retirement, but our insight tells us that isn't happening and that doctors are still confused."

"Fortunately, knowledgeable, credible, expert advice can help to get people's retirement plans back in good health."

Wesleyan specialises in providing specialist financial advice and services to doctors, dentists, lawyers and teachers.

  • Research based on a survey of 203 doctors by Censuswide on behalf of Wesleyan, February 2016

(*Research based on a survey of 101 doctors by Censuswide on behalf of Wesleyan, February 2014).

Doctors puzzled by pensions (pdf)

'WESLEYAN’ is a trading name of the Wesleyan Group of companies.

Wesleyan Assurance Society and Wesleyan Bank Ltd are authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Wesleyan Financial Services Ltd, Wesleyan Unit Trust Managers Ltd, Practice Plan Ltd and DPAS Ltd are authorised and regulated by the Financial Conduct Authority.  Advice about investments, insurance and mortgages is provided by Wesleyan Financial Services Ltd.

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