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Pension freedoms ‘make saving more attractive’

An overwhelming majority of consumers believe the Government’s pension freedom reforms have made pensions more attractive, research shows.

A survey of almost 7,000 investors by Hargreaves Lansdown found 94 per cent of respondents believe the freedoms have made pension saving more attractive.

Some 56 per cent of investors said they would consider income drawdown for some of their pension, while 29 per cent said they would consider it for all of their retirement pot. The remainder said they would not consider drawdown at all.

The survey also found that 37 per cent of investors believe a guaranteed retirement income is “extremely important”, while a further 35 per cent said it is “quite important”. Only 4 per cent said it is not important at all.

For investors looking to take cash from their pension, the two most popular intended uses were to provide an income to live on and to invest in Isas.

The most popular single expenditure item was buying a car, which came higher than holidays and home improvements. Only 4 per cent of investors said they would draw money from their pension to invest in property.

Hargreaves Lansdown head of pensions research Tom McPhail says: “The Budget reforms have had a remarkable impact on investor sentiment towards pensions. At a stroke the Chancellor has reinvigorated pensions and made retirement saving attractive once more.”

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. This is a survey of those already saving towards retirement (doesn’t have to be a pension) so cannot be relied on.

    The real truth will be if we see an increase in pension saving with AE contributions stripped out.

  2. I’ve received hardly any enquiries from people who feel these new freedoms warrant a fresh look at how much, if anything, they’re setting aside towards their retirement and the majority of my clients aren’t allocating anything like enough to get on target for an eventual fund of sufficient size to provide a decent level of retirement income. A couple have asked about adjusting the balance between the amounts they’re allocating to their ISA and PP but that’s about it. You can lead a horse to water but, no matter how sincerely you try to persuade him that he ought to, you can’t make him drink.

    It’s shame the government hasn’t restored Contributions Protection (WoP) and the facility to incorporate life cover (subject to a minimum level of ongoing contributions to retirement benefits)

  3. Q. Do you feel that surveys on meaningless attitudes to vague questions commissioned for a bit of cheap PR are a) somewhat important b) quite important c) reasonably important d) moderately important e) neither important nor unimportant f) UKIP.

  4. Actually Julian we have! Existing clients who are totally confused. In spite of our best efforts clients are still asking questions often because of things they have read in the press. In some ways this is not a bad thing as it does keep you in contact with clients but it takes time and someone has to pay for it.

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