As the ten-year anniversary of the introduction of Pension Freedoms approaches, new research from Standard Life, part of Phoenix Group, finds that while the vast majority (79%) value the choice and control the legislation provides, some who have accessed their pension funds have concerns about the long-term impact.
On average, those who’ve accessed their retirement funds since Pension Freedoms did so at the age of 60. Almost half (46%) say this was earlier than planned, while 40% did so in line with their intended retirement age. A smaller proportion (8%) delayed accessing their funds beyond their original plan.
Despite the appreciation for flexibility, a quarter (24%) of those who have accessed their pension worry about whether they have enough to love comfortably, and one in ten (11%) regret the timing of their withdrawal. A further 9% report facing difficulties in managing their pension funds.
Many go it alone, but no regrets for those who took advice
Pensions Freedoms gave retirees more options about how to take and use the money saved in their pension, but many are navigating these choices without professional financial support. Two-thirds (66%) of those who accessed their funds did not seek professional advice, instead choosing to manage their pension independently. Around one in seven (15%) sought advice on an ad hoc basis, while 17% engaged an adviser for ongoing support. Among those who did take advice, more than three quarters (78%) are glad they chose to do so.
Mike Ambery, Retirement Savings Director at Standard Life, part of Phoenix Group commented: “A decade on from the introduction of Pensions Freedoms, many people continue to value the flexibility and control it offers and predictions of mass splurges on Lamborghinis seem to have been mostly proved wrong. However, as the initial excitement subsides, some are finding that taking full control of their finances without support can be challenging – particularly when it comes to ensuring their money lasts for the duration of their retirement.
“If we want to continue revolutionising people’s retirement prospects across the next decade, we need government and regulators to take positive steps towards helping people move from complexity to clarity when it comes to making major financial decisions around retirement. The ongoing consultation on Targeted Support, if implemented properly, has the potential to lead to an accessible solution capable of guiding people towards the right option for them, whether this be a single product or a mixed approach to suit their different needs as they move through retirement. Ultimately, this should lead to improved outcomes – and fewer regrets – for retirees.”
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