Pensions - Articles - Increase in those accessing pension pot ‘of little surprise’

 “It’s little surprise that the number of people accessing their pension flexibly has picked up in the last quarter. There were well documented problems for people hoping to access their money in the early days of freedom and choice, but these have largely been overcome. The ability to take cash or drawdown over time has a great deal of appeal for many, particularly as annuities have largely fallen out of favour. But most people still want more guidance, or better advice, to ensure they don’t run out of cash in retirement.

 
 “The recent FAMR review’s recommendation that Treasury narrows the definition of regulated advice removes a significant barrier that has often stood in the way of employers providing this much needed guidance. Many that we work with, while keen to do more to support their staff, have been afraid of straying into regulated advice territory.

  

 “Looking forward we would expect the numbers accessing the freedoms to level out. We’ve already seen some limited move back towards annuities as people have recognised the value of having a guaranteed income to last to the end of their life. But, in our view, the point at which people will take out an annuity in future may change – this is much more likely to be closer to 75 than 65 in future.

  

 “We believe people should start to take an alternative approach to their retirement planning, by dividing savings into different ‘buckets’ to cover various costs in retirement such as immediate spend at retirement, necessities, and end of life planning.”