View more on these topics

Billions in freedoms cash moved to bank accounts and Isas

Savers have cashed in billions from their pensions since the freedoms, but new research suggests many risk tax penalties or low rates by keeping the money in bank accounts or Isas.

A study of 370 consumers who have accessed their pension since the pension freedoms started in 2015 shows that while nearly £3bn has been used to pay off debt, others have taken a less financially sensible route.

At least £4.5bn in pension savings is now either in low yielding current accounts, or has been invested in other products such as Isas.

AJ Bell senior analyst Tom Selby says: “This might not be a problem in the short-term – indeed it makes sense to have some ready-cash available in most cases – but it almost certainly isn’t an advisable long-term investment strategy, particularly with interest rates at record lows and inflation returning to the UK economy.

“We also know that too few people regularly review their retirement income strategy – tackling this lack of engagement will be crucial in ensuring savers are equipped to make the most out of their retirement pots.”

Another £2.3bn has been used to fund luxuries like holidays, cars and home improvements, and only £60m of the total £17.5bn in withdrawals has been used to fund care.

The buy-to-let market and children from wealthier families have been the main beneficiaries of the freedoms withdrawals, with £1bn invested in buy-to-let property and £1.2bn used to help children.


File image of a pension savings pot

Regulator hands out £15,000 fine for pension contributions bungle

The Pensions Regulator has fined a trustee £15,000 for failing to report unpaid pension contributions. Smart Pension, which runs the master trust, did not tell TPR that nearly 500 employers had not paid nealry £900,000 of contributions that were due. Smart Pension also did not tell members about the problem. TPR suspends trustee after […]


Standard Life shareholders approve Phoenix deal

Standard Life Aberdeen shareholders have approved the sale of the company’s UK and European insurance arm to Phoenix at it general meeting today. Shareholders also approved a plan to return £1bn to shareholders through a “B share scheme” and £750m through a share buyback programme. Standard Life announced in February it was selling its insurance arm […]


Govt rejects default pathways for decumulation

The government has rejected a recommendation to introduce default decumulation pathways saying it would be inconsistent with pension freedoms. In April the work and pensions select committee published a report on pension freedoms where it proposed ways outcomes for savers could be improved. Among the recommendations, the committee said every drawdown provider should offer customers a […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm