24 July 2007 - Publication of DWP research report: No 447 Evaluation of Automatic State Pension Forecasts
Research is published today by the Department for Work and Pensions which presents the findings from an evaluation of Automatic State Pension Forecasts (APF). The evaluation surveyed recipients’ views of the APF; it also assessed the extent to which the APF improved recipients’ knowledge and understanding of pensions, and whether there had been any impact on recipients’ retirement planning activities.
The main findings were as follows:
Levels of engagement with APFs, as measured by levels of recall and readership, were poor. Only a third of recipients spontaneously recalled the APF mailing, rising to 62% after prompting. Readership levels were also low, with only 31% saying they had read all or some of the APF mailing.
The majority of those who engaged with the APF viewed it positively:
- The APF was thought to be “fairly” or “very” useful by three-quarters of those who read or glanced at it (equivalent to 38% of all recipients); and
- Nearly 70% of all recipients said they placed at least some trust in government information like this on pensions and retirement planning.
Respondents with better pension provision and/or (self-reported) pensions knowledge were significantly more likely to recall/read the APF and to take retirement planning actions, implying high levels of ‘deadweight’ for the APF mailing.
There were no significant differences in terms of actual pensions knowledge or retirement planning actions taken between the APF and control sample, implying little or no impact of the APF.
Although APF readers exhibited a better actual knowledge of pensions than non-readers, other variables such as age were found to be more important factors associated with pensions knowledge than readership of the APF. Similarly, APF readers were found to be more likely to have taken, or intended to take, retirement planning actions but further analysis showed that variables such as existing levels of pension provision were more important factors associated with retirement planning behaviour.
Notes to Editors
- Automatic State Pension Forecasts (APFs) were sent to all people aged 20 and over who had not received or requested a pension forecast(s) from other sources, between December 2004 and November 2006. In all, around 16 million were sent during this period. A further 1.5 million had previously been sent to self-employed people between May 2003 and May 2004
- Telephone interviews were conducted with around 9,000 people who were sent an APF before the end of 2006. In addition, a control group of around 3,000 people who had not received an APF were interviewed to enable an assessment of the net impact of APFs.
- The aims of the APF were to inform people of the estimated amount of State Pension they will receive; improve understanding of pensions more generally; and enable them to make informed choices about the different options for saving for retirement and plan accordingly.
- This is the largest and most robust evaluation of pension forecasts yet undertaken. It is the first to use a control sample for comparative purposes.
- “Evaluation of Automatic State Pension Forecasts” by Bunt K. and Barlow J. IFF Ltd. 2007. The report is published in the Department for Work and Pensions Research Report Series (Report No. 447).
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Prepared by: Department for Work and Pensions Pensions Analysis Directorate