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Over-55s to splurge £3bn pension cash on ‘cars and kitchens’
The Chancellor’s pension reforms will see over-55s take out a total of about £5bn from their pension pots after the rules change in April next year, an actuarial firm predicts.
Hymans Robertson said the freedoms would result in a spending boom which would see £5bn taken out over the first three months.
The Telegraph reported the firm believes £3bn of the £5bn will be spent on luxuries such as new kitchens, conservatories and cars. It said the money would boost the UK’s total spending by 0.6% in 2015.
Chris Noon, a partner from the firm, said: “There will be an impact on spending and it will be noticeable.”
Adam Boulding, from the insurer Legal & General, told the Telegraph: “For many people, their pension pots will be, perhaps, £20,000 to £40,000.
“If they try to get an income out of that, it will buy only the very smallest annuity. Instead they could spend the money on making a real difference to their lifestyles.
“They may fancy a new conservatory on the back of the house, or be desperate for a new kitchen, or the car may be on its last legs.”
