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Retirees make hay with new pension freedoms

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Pension freedoms are helping retirees make the most of their later years, with many learning new skills and travelling, according to the LV= tenth annual State of Retirement Report.

Half (49%) of retirees now say they view their post-work years as an exciting phase of life, with many using their free time to learn, see and experience new things. Nearly two thirds (64%) of people who retired since April 2015 say stopping work has opened up new opportunities, with one in five (20%) having decided to learn new skills and more than half (55%) devoting more time to their hobbies.

The report also showed that those who have retired since pension freedoms came into effect are being more adventurous with their holidays. Nearly half (46%) are holidaying in places they’ve never been to before, compared to 39% of people who retired before the freedoms were introduced.

In spite of concerns about the financial constraints of pensioners, the report shows people viewing retirement in an increasingly positive light. Two in five (42%) of those not yet retired think retirement will be exciting and three in five (60%) believe they will have the opportunity to do more of what they enjoy.

In line with changes to the official retirement age, many of those under 65 now expect to be working later – an additional four years and two months on average. In fact, one in ten (10%) expect to continue working for more than 10 years after retirement, with this doubling to one in five (19%) for those between 35 and 44 years old.

John Perks, managing director of Life and Pensions at LV=, said: “This is a new age of retirement. With the introduction of pension freedoms, people have more flexibility to take their money as they want and spend it when they want, and there is clearly an appetite for this. However, bringing pension freedoms into force is just the beginning. While the reforms have the potential to provide consumers with an enhanced retirement, there is evidence they aren’t yet working for consumers, with very few engaging with their pensions.

“In order for the pension freedoms to be a success, it’s imperative the government keeps up momentum to ensure consumers are able to get the right outcomes. This includes giving people better information about their pensions through the pensions dashboard so people can better plan, and increasing the take up of financial advice.”

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