You are here: Home - Retirement - Retirement planning - News -

People still in the dark over pension freedoms…14 months on

Written by: Paloma Kubiak
Three quarters of people don’t understand the pension freedom reforms more than a year after they were introduced, according to a survey.

The research from Wesleyan found 12% incorrectly believed the pension reforms, which came into effect in April 2015, meant you can withdraw your full pension fund at any time, completely tax free when in fact you can only withdraw 25% tax free, with the remainder taxed at your marginal rate.

One in seven also wrongly believed you could only make withdrawals from your defined contribution pension once you’d retired when you’re actually able to from the age of 55.

According to the the poll of 1,000 people, four out of ten haven’t done any research about pensions in the past year, despite all the changes, while more than a third have no intention of researching their retirement plans in the next 12 months.

The research also found three quarters (73%) of people are unaware they can get upwards of 25p from the government for every pound invested in a pension.

More than half of respondents didn’t know how much to set aside for a comfortable life in retirement, though they expected to need an average of £22,596 a year, almost a third more than the actual average UK pension income, leaving a potentially very large funding gap for the average retiree.

Vicki Wentworth, chief customer and strategy officer at Wesleyan, said: “For people to enjoy the standard of living they dream of in retirement, it’s imperative they not only plan their finances now so they can afford it, but continuously review those plans.

“If what we are hearing is true, that many people have not started, nor do they intend to start, any research around what the pension reforms mean for them, then there is clearly a real and apparent need for knowledgeable, credible, expert advice.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Your right to a refund if travel is affected by train strikes

There have been a wave of train strikes in the past six months, and for anyone travelling today Friday 3 Febru...

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

How to help others and donate to food banks this winter

This winter is expected to be the most challenging yet for the food bank network as soaring costs push more pe...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week