Yesterday I referred to the work done by the FCA asking ordinary people how they were expecting to use pensions to pay the bills in retirement.

People are  taking workplace saving very seriously. But for a pension?

The FCA’s report is offering selected findings on pensions. I am focussing on what people are doing with their workplace pensions, especially those who are still at work.

Pensions are paying an important part in the finances of people. About a quarter of all UK adults were being paid from a pension but two thirds of those 13m people were getting a defined benefit pension. This might be as a result of working for a company who provided a DB pension of from working in the public sector (which all do).

A third of people accessing pensions claimed the money was coming from DC funds. But it’s not clear how much money from DC is coming as pension. Separate research suggests that most money taken early is taken as “cash”. Cash is what is being drawn from DC saving (not income).

Pension saving pots are making a difference to the behaviour of those over 55, more than a third of those over 55 who are still working are relying on their lump sum or pension.

While three quarters of people over 55 and retired are living on their pensions.

But it’s DB doing the heavy lifting on pensions and cash is being paid from DC pots.

A third of people still at work aren’t thinking about retirement income

Taking it across everyone it seems that just under a third of people still working don’t think about retiring  when they are in work. Some people aren’t imaginative, some do not want to stop working and some do not think they can stop work, but at least the numbers are coming down.

A third of people who are thinking about retirement don’t trust their workplace pensions

People are either being realistic about their income in retirement or they have haven’t much trust in their private “pensions” to give them a pension. That those who aren’t owning their own house, are women and don’t earn much say they are relying on the state pension sounds “realistic”.

The State Pension is doing the heavy lifting later on

DC pensions play a part in planning ahead for retirement.

This is really interesting and encouraging. Getting on for three quarters of us who haven’t started getting pensions see them as important (with the caveat that for over a third of us that means state pension). Though people expect to be paid income from all kinds of things, those who aren’t paid from their pension pot, expect that they will.

Things look like they will have to change for this to happen.

People don’t consider pensions will be enough to fill the gap from full time work. The FCA carefully explains that pensions will be more important in later life than non-retirees think. The conclusion that pension  income will be more critical to these people later in life is telling.

DC aren’t featuring as lifetime income for the younger or elder

The fact that you are over or under 45 doesn’t make much difference, people who aren’t living off their DC pension savings are in one mind, their DC pension savings are not going to let them retire.

There is a group of just over a third who are confident that their pension will let them stop working and this is a similar number to the numbers claiming to getting advice. This may be a remarkable compliment to financial advisers or may tell us that if you don’t feel well off in the future, you aren’t talking to a financial adviser.

Either way people do not think their pensions are up to the job that auto-enrolment workplace pensions set out to do – at least not yet.

We need to get pensions paid when we stop work

What is clear from this section of the FCA’s survey is that DC pension money is not considered adequate to retire on but is being used from 55 on to pay the bills either to replace work income or for other reasons.

There can be little doubt that people can’t have it both ways, they can’t have short term money and the income they know to stop working. They know this, many people rely heavily on the state pension and use their workplace pensions to bridge them till it comes along.

Here we may find a “default” has already developed among working people who see nothing ahead from workplace pensions to make them stopping taking pension money early.

Much as we would like more money flowing into pensions by default, it is right that we start creating a “new normal” or “default” for people in workplace pensions that establishes the way most people will take their money and when,

Pushing back the date to a time when the pension can make a realistic difference to people’s life not just immediately but over time, will make workplace pensions just that, a lifetime income not a bridge to the state pension, an inheritance or a windfall from property.