Today’s official figures1 report that
£32.97bn of taxable payments have been taken from pensions since
freedom and choice was introduced. This equates to an average of
£18.75m being flexibly withdrawn every day over the past 1,760
days since pension freedoms were introduced.
Alistair McQueen, Head of Savings and Retirement at
Aviva comments:
“The pension freedoms continue to break records, exceeding
expectations, as 1.34 million individuals have so far decided to
take advantage of their greater flexibilities.
“However, the peak for pension freedoms are yet to come. In
the coming decade a record nine million people are set to enter
the arena of the pension freedoms at age
55.2 This is more than we can expect to see in
any decade that follows. The 2020s are likely to see “peak
pension freedoms”.
“With pension freedoms’ popularity continuing to grow and
savers being entrusted with increased individual responsibility,
it is worrying that 94% of adults are flying solo, not seeking
any financial advice each year.3
“Last week, the Money and Pensions Service (MAPS) launched
its strategy with a vision of “everyone making the most of their
money and pensions”.4 This is the right vision,
but MAPS needs the support of the industry, regulator and
government if we’re to close the advice gap.”
Aviva’s five top tips for those considering their pension
freedoms are:
-
Take your time: The
pension freedoms are available from age 55, but there is no
need to act at age 55. And your time in retirement may be
longer than ever before. Act in haste and you may repent at
leisure.
-
Avoid the
scammers: Pensions represent the
biggest single source of private wealth in the UK, so the
attraction for scammers is obvious. If you receive a cold-call
to discuss your pension freedoms, just hang up. Since January
2019 it has been illegal to make these cold calls. See the
FCA’s ScamSmart website
for more advice.
-
Use PensionWise: The
government’s free PensionWise service
provides free guidance on the pension freedoms. Take advantage.
It has a high 97.9% customer
satisfaction.
-
Shop around: You may have
been saving for 30 years, so take more than 30 minutes when
considering your options. Shop around for your best
deal.
-
Think about tax: Nothing
is certain, but death and taxes. Income tax follows us through
our working life and into retirement. The way in which we
access our pension savings can have significant implications
for our tax bills, and income in retirement. With
consideration, tax can be less taxing.
Ends
Sources:
Contains public sector information licensed under the
Open Government Licence v3.0.
1 https://www.gov.uk/government/statistics/flexible-payments-from-pensions
2 https://www.ons.gov.uk/peoplepopulationandcommunity/populationandmigration/populationestimates/bulletins/annualmidyearpopulationestimates/mid2018
3 https://www.fca.org.uk/publication/research/financial-lives-consumers-across-uk.pdf
4 https://moneyandpensionsservice.org.uk/uk-strategy-for-financial-wellbeing/
