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The PPI is an INDEPENDENT educational, not-for profit research institute. We undertake rigorous research from a neutral, long-term perspective

Reports and Briefing Notes

Closing the gap: the choices and factors that can affect private pension income in retirement

The NAPF commissioned the PPI to illustrate the impact that a number of choices and factors can have on the level of private pension income in retirement.

When saving for retirement in a Defined Contribution (DC) pension scheme there are a number of choices that an employee and their employer will make. These choices can have an impact on the final income received in retirement by the employee. Employee choices include: increasing employee contributions; whether to opt out of pension provision; when to retire; how much of the pension fund to convert into an income and which retirement income product to use to convert a pension fund into an income in retirement. Other factors include employer choices regarding the level of employer contributions and the level of charges of the pension scheme.

The research considers the impact that increasing pensions contributions, opting out of pension saving, working longer, shopping around for the best deal on an annuity or being in a pension scheme with low charges can have on an individual’s defined contribution private pension income.


Chapter one of this report sets out the case studies and the scope of the analysis.

Chapter two considers the potential impact of individuals making different choices and other factors on private pension income.

Chapter three considers the possible cumulative impact of making a series of choices and other factors which can affect the resulting private pension income.



Executive Summary

Executive Summary

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