This week is Pension Awareness Week, running from 15th–19th September 2026, with Pension Awareness Day marking the start of the campaign on 15th September. The initiative encourages people to check their pension pots, understand their options, and take practical steps towards financial security in later life. It comes as official figures show average earnings growth of 3.9% is expected to determine the triple lock uplift for the state pension from April 2027. This would take the full new state pension from the current £241.30 a week to around £250.70, equivalent to roughly £13,036 a year and above the frozen personal allowance of £12,570 for the first time.
Research from mutual society Shepherds Friendly points to a wider concern around retirement readiness, with many people saying they lack the confidence to navigate the complex financial decisions they face as they approach retirement.
Derence Lee, Chief Finance Officer at Shepherds Friendly, said: “With Pension Awareness Day taking place on the 15th September, our research has highlighted a worrying confidence gap around retirement planning, with almost 2 in 5 (39%) people admitting they don’t feel confident when it comes to pension planning.”
“This matters because people approaching retirement are facing some of the biggest financial decisions of their lives, yet many don’t feel equipped to navigate them. One of the most significant decisions is how they use the tax-free cash available from their pension. Depending on their circumstances, most people can usually take up to 25% of their pension benefits tax-free, subject to the £268,275 Lump Sum Allowance.”
“However, taking the lump sum is only the beginning of the decision-making process. People then need to consider how best to use the money, whether that means paying off expensive debt, building a cash buffer, saving or investing through an ISA, or investing for the longer term.”
“Our research found that almost half (48%) of people lack confidence when it comes to investing, while 43% aren’t confident choosing the right ISA for their goals, which highlights why these choices can feel daunting. With so many options available, it’s important for people to consider what they want their pension savings to achieve, when they might need access to it, and how much risk they’re comfortable taking. For those who are unsure, seeking regulated financial advice can help them make an informed decision about how best to use their pension savings.”
Beyond the percentage and allowance Lee outlines above, the rules also set out when and how the money can be accessed. From age 55, rising to 57 in 2028, the tax-free portion can be drawn as a cash sum, provided the total across all pots stays within the £268,275 Lump Sum. Anything above that limit is taxed at the individual’s marginal rate. Once the lump sum is taken, the remaining funds can be left invested, used to buy an annuity, or drawn down flexibly, with each route carrying different implications for income, tax, and longevity risk.
The Shepherds Friendly findings come from a survey of 2,000 adults that also examined broader financial literacy. Just 23% of respondents passed the society’s money literacy quiz, down from previous years. Confidence shortfalls were particularly marked among younger adults, although the implications for those nearing retirement remain significant given the scale of the decisions involved.
Experts stress that regulated financial advice can help people match these choices to their personal circumstances, goals, and appetite for risk. Free guidance is also available through services such as MoneyHelper, which offers tools to check state pension forecasts and explore retirement options.
As Pension Awareness Week continues, the research sends a clear message: while awareness campaigns and upcoming state pension changes keep retirement in the public eye, many people still feel under-equipped for the practical decisions that will shape their financial future. Building knowledge and, where needed, seeking professional support remain essential steps towards greater confidence and better outcomes.