One third of savers enquire about raiding pension pots

One third of savers have “actively enquired” about raiding their pension pots next April as restrictions are lifted, deVere Group has said.

The new pension rules outlined by Chancellor George Osborne in the Budget include lifting limitations on pensions access to the over 55s, representing the biggest legislative change on the pensions landscape since 1921.

deVere Group senior technical adviser Reece Fallaize said those commentators hailing the “scrapping of restrictions to pensions access as a victory for freedom and choice for savers” are providing “misguided rhetoric” to the population.

“Since the Budget, we estimate a third of all clients who have a pension have actively enquired about cashing in their pensions. The ability to access pension pots early is contrary to the overriding purpose of having a pension, which is to provide a steady income throughout retirement.

“We share the Financial Conduct Authority’s concerns that some individuals might not necessarily have the financial literacy to always make the most informed decisions. Mistakes with retirement planning can be extremely costly on many levels, for the individual and their families as well as the state, and often incredibly difficult to overcome.”

Fallaize said savers should “resist, where possible, the temptation to access pensions to avoid the risk of compromising retirement ambitions, making hasty decisions, and facing substantial tax charges”.

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