Just over two thirds (34%) of respondents believe there is too much choice when it comes to saving for retirement, according to research by Willis Towers Watson and Nottingham University Business School.
The study, which surveyed 2,000 UK employees, also found that 35% of respondents feel that a lack of knowledge or information affects their confidence when making saving decisions.
The research also found:
- 47% of respondents have a crisis of confidence when making final financial decisions.
- 43% of respondents continue to have doubts about the financial choices they have made.
- 48% of respondents cite low or poor interest rates as a cause of frustration around long-term saving, while a lack of certainty over the rate of return (22%) and being unclear on the extent of investment risk (16%) are also listed as areas of frustration.
- A quarter (25%) of respondents name the complexity of investment choices available as a cause of their lack of confidence, and 25% cite a general distrust of financial institutions.
Minh Tran, director of wealth and retirement practice at Willis Towers Watson, said: “The results of our study highlight a savings problem, that has become more pertinent with the introduction of auto-enrolment. Instead of encouraging people to save more, increased choice seems to have created a decision roadblock. Coupled with economic uncertainty and conflicting financial priorities, this is creating a kind of pension paralysis where most employees end up in the default option.”
James Devlin, professor of financial decision making at the Centre for Risk, Banking and Financial Services at Nottingham University Business School, said: “The findings reveal a significant confidence pinch-point which occurs when savers are faced with the decision making moment of truth. Although savers like the idea of having options and want to shop around, when faced with too much choice and complexity, the decision becomes overwhelming and this can cause inertia.”