The new pension savings market offers much more flexibility and choice post–6 April this year, which is a positive, but it can be overwhelming. For people planning for retirement in the new world of pension freedoms, there are both risks and opportunities – from passing on your pension to loved ones, to making the most of tax relief.
An unintended consequence of the pension reforms is that any divorcee with a pension earmarking order may need to act fast to protect their benefits. Any earmarking order that provides the ex-spouse with a fixed percentage of the pension income in retirement should be checked to ensure benefits are protected now that the member no longer needs to take their pension as an income and can instead take all the cash out as a lump sum.
More than one in ten (12%) 20-35 year olds are prepared to ask their parents to access pension savings to help pay for a mortgage deposit, research from Old Mutual Wealth[1] shows. But only half as many over 55s are willing to use their pension to help children or grandchildren buy a home.
Two-thirds (65%) of people aged 55 and over who are not yet retired believe that it should be compulsory to receive financial advice at retirement according to findings from Retirement Advantage.
Your pension is your life savings you’ve built up to give you the retirement you want. Since new pension rules came into effect from 6 April this year, pensions have become more flexible – including a cut in tax when a pension is passed on.
Just under a third (30%) of people believe the recent pension reforms will affect their plans for retirement income. Responding to a Schroders survey, of the people who said pension reforms will affect retirement, a significant proportion (45%) said they are likely to consider taking some money as cash and putting the balance in an investment fund.
On 6 April this year, ‘pensions freedom day’, the pension landscape changed forever. From this date for the first time ever, individuals were given complete control over all the money in their ‘defined contribution’ retirement savings plans, whether large or small.
The new pensions freedom rules giving far greater flexibility over what you can do with your pension pot came into force on 6 April 2015.
According to new research conducted by YouGov and Old Mutual Wealth, nearly half (48%) of those approaching retirement (aged 55-64) do not know how long their pension income will last. With pension providers reporting demand for flexible withdrawals, there is a significant danger that pension funds could run dry if people do not plan carefully or take professional financial advice.
UK adults have an average eight-year blind spot when it comes to financial planning – and can only see themselves in the future as far ahead as 2023, new research from long-term savings and investment specialist Standard Life reveals.
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