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The rise of encashing pensions without taking advice



Posted on: 26th March 2019

Latest research has shown that over £3.2 billion has been withdrawn as lump sums from pensions with any financial advice being given. Saga polled 2,000 UK adults and 1 in 7 accessed their pension without advice whilst only 16% of adults understanding the pension freedom rules, introduced in April 2015.

Encashing pensions without taking advice

The Saga poll also looked into attitudes towards advice and 1 in 10 stated that they have relied on or considered advice from friends, family, colleagues but not a trained professional. Another 12% state they would not seek any advice before taking a further lump sum from their pension.

Jeff Bromage, the managing director at Saga Money said, “obtaining advice from an independent financial adviser can cost a significant amount, which can put people off and therefore is an option only the more financially secure are prepared to pay for.”

Challenging misconceptions

However, independent advice can and often does end up saving people more then it costs and will lead to a more secure financial future at a person’s most vulnerable financial time as their regular, secure employment income ceases.

An analysis by Citywire and AJ Bell found that three in ten did not know if their pensions had taken a significant fall since entering retirement and accessing their pensions. Citywire concluded that these people are relying on blind luck on ensuring their retirement income strategies remain sustainable.

Given the newly increased volatility in the financial markets, good, independent advice can be worth its cost in ensuring that retirees weather the tribulations of the market and continue to have a suitable, sustainable retirement strategy.

Why seek advice?

Some may question why they need to take advice when they are a ‘seasoned’ investor? Financial planners are regulated, highly-qualified experts who take an impartial view on your entire financial position to ensure that you are accessing your pensions and investments in the most tax efficient manner and also ensure that your investments are in line with the level of risk appropriate for you!

Talk to Haven IFA

Here at Haven IFA, the first meeting is on us so you can have a no-obligation chat with one of our expert financial planners with over a hundred years’ experience between them dealing with pensions and investments. Throughout our process, we perform an analysis of your existing investments, your risk profile, the costs, charges and performance of your existing policies and a comprehensive cash flow model showing how your pensions will support you in retirement.

Get in touch to have a chat with us about securing your financial future for a happy, prosperous retirement.