Our research shows that despite 87 per cent of under 39 year-olds believing that auto enrolment into a pension is a good thing, 60 per cent hadn’t thought about their actual retirement income.

Those who had thought about turning their savings into income expressed a wide range of expectations. Some thought NEST would automatically pay them an income, a bit like the State Pension, while others had thought about using their pot to supplement other pensions. Additionally, some simply had no idea what would happen at retirement. One trend which was clear was the need for income with as much flexibility as possible to meet changing circumstances.

Changes to legislation in the last few years have meant that people have much more freedom regarding how they can use their pension pots. However, for many, this freedom can mean difficult choices. Faced with these choices over 50 per cent said that once they’d made an initial decision, they would welcome a pension that evolves automatically as they get older, with NEST doing everything for them.

Based on this research, NEST is considering how guided retirement pathways could be developed to help members. These would offer the good value and strong governance provided by NEST combined with a flexible yet sustainable income solution throughout retirement. Freedom of choice would still be there, as the pathways wouldn’t be compulsory but would offer a suggested route.

At the moment, around 98 per cent of NEST members will cash out their pot in its entirety. This is not surprising, given that most members have fairly modest pots. Looking forward to a time when pot sizes at retirement are bigger, boosted by higher contributions and longer savings periods, NEST is looking at developing guided retirement pathways to meet these evolving needs.

In the interim, NEST is supporting members by improving the help we provide via our website, as well as offering some additional flexibility at retirement. In terms of guidance and tools, our member website offers additional tools to help members start thinking about their retirement. It’ll be adapted and updated over time based on the needs of our members, employers and their overall feedback.

To offer more flexibility, we’ll soon be enabling members to withdraw money on a monthly rather than annual basis, should they wish to. This isn’t part of a guided pathway, but simply a more flexible option, which takes members’ circumstances into consideration. As well as providing support for members in the event of emergencies, this additional flexibility can also help members avoid paying too much tax or affecting any other benefits they may be receiving.

As NEST grows and members’ retirement pots get larger, NEST is committed to offering the right support and products to help members enjoy a secure and happy retirement.