Pensions - Articles - Over 55s value a regular income from State Pension

The vast majority of over 55’s who have used pension freedoms to access their private pensions say they want the State Pension to deliver a lifetime income in retirement, according to new insight from Canada Life. Less than one in ten over 55s would choose to take the State Pension as a lump sum up front at the point of retiring.

 This contrasts with how people are using their private pensions, preferring the flexibility of drawdown or accessing the pension through regular cash withdrawals, over and above the security of a guaranteed lifetime income stream using an annuity2.

 Andrew Tully, technical director at Canada Life UK, said: “When presented with the option of commuting the State Pension into a cash lump sum, most people choose the safety net of a guarantee lifetime income. Of course the option to take the State Pension as a one off cash sum is not available, but the research does show how people place a value on a regular income, whether that be to pay the bills or simply provide peace of mind.

 “Drawing comparisons with pension freedoms is interesting as we know there has been a significant shift away from annuities towards income drawdown over the past four years. And yet people shouldn’t view it as a binary choice between the two, as you can blend drawdown and annuities to get the best of both worlds, security and flexibility.

 “A financial adviser is best placed to be able to construct a plan which can best match individual needs, retaining flexibility while providing security throughout the retirement journey and building on the bedrock of income provided by the state pension.”

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