new pension freedoms

How to Make Pensions Freedoms Work for Savers



Posted on: 20th August 2020

Openwork research has stated that the new pension freedoms can only work well for pension savers if access to financial advice improves.

Currently, 51% of surveyed advisors believe that a gap in access to pension advice is remaining the major concern whilst a further 56% base their concern on low level consumer knowledge five years after introduction of reforms.

Other major issues advisors cite is increased drawdown, with over two thirds extolling their concern over retirement savers not being advised about effects before going into drawdown.

Up-To-Date figures from HM Revenue and Customs highlight over 35 billion pounds have been withdrawn from pension funds by the over 55 demographic since pension freedoms started with 2.3 billion withdrawn in the start of 2020 alone. The ongoing threat of the Covid-19 pandemic could see further over-55s withdraw cash from their pensions according to industry experts.

Openwork’s nationwide study has however detailed that retirement planning was seeing a surge in popularity, with almost 3 quarters of advisors reporting increase in demand for support over the last year.

Some advisors label the biggest threat to confidence from the consumer in pension freedoms was the worry of money shortages. Also affecting confidence was warnings of potential government changes in relation to pension rules as a factor.

Openwork has stated further that the success of pension freedoms was based on the number of people wanting access to money and demand to take cash out of their pension. The continuing worries about how well it continues working in practice for retirement savers and advice was the missing link for it to be classed as a complete success.

Retirement savers are requiring professional help in getting the best value from pension funds and have increased access to the best advice to be able to have stable confidence in the system.

For independent financial advisors Manchester to give advice and guidance on pension freedoms, contact Haven IFA