Research from Citizens Advice has shone a spotlight on consumers’ experience of pension freedoms and how the process of accessing a pension could be improved.
Earlier today, Money Marketing reported how 29 per cent of those polled who had used pension freedoms were transferring their money to a savings account. For pots worth over £100,000 the proportion rises to around a third.
Alongside the research, Citizens Advice carried out 20 in-depth interviews with savers about their experience with pension freedoms.
Here we set out some of the responses.
Generally, consumers are happy that pension freedoms have been introduced, with 35 per cent of respondents saying the reforms have improved their retirement prospects.
“This is the only thing the Government has ever done financially that will actually benefit me. It’s wonderful, I have control of my money.”
But one in 20 of those surveyed believe pension freedoms has made their retirement prospects worse. Consumers have also raised concerns about not fully understanding the tax implications of taking their cash.
“I got the money in the end, but if I’d known how much faff it would take…and all of the other delays I would have just taken the money from other savings.”
“I’m very happy with how I’ve taken the money, but the freedoms should be treated with caution. My friends have been inundated with phone calls.”
“They told me about the tax on the pension but what I possibly wasn’t aware of was that they would look at my other income and put me on emergency tax.”
The research also suggests consumers may have lost sight of a pension being there to pay for retirement needs.
“I took two grand because I needed a boiler, and the rest of it has gone straight to the mortgage.”
It also points to the decisions savers are grappling with in terms of stayed invested versus guaranteed income, as well as future decisions about taking money from their pension.
“I’m not going to look at anything for a year. I’m sick of pensions now and I don’t want to start worrying about every change in the market.”
“I had three pensions I was looking at but it was just such a minefield reading through all the documents that I only used one in the end. It would have really helped if they’d been presented in the same way.”