Pension freedoms not resulting in higher retirement incomes

Average income from workplace pension schemes has fallen since the introduction of pensions freedoms in April 2015, research from Just Group has revealed.

Just found that the average retirement income from occupational schemes in 2017/18 was £148 per week, the lowest figure for four years.

This represents a £12 per week decline in comparison to the previous year, when the average weekly workplace pension income was £160.

Just group communications director, Stephen Lowe, said that there will be “clear winners and losers” from the pension freedoms reforms, but that the figures “don’t show that the average pensioner is winning – greater pension freedom is not equating to greater pension income”.

Income from personal pensions also decreased over the same period, with the average weekly income totalling £19 in 2017/18, the lowest for six years. In 2016/17, this figure stood at £23 per week.

Lowe continued: “We can all think of examples where the extra flexibility gives options that suit some people.

“However, pensions are primarily designed to provide income in retirement and money taken early will not be available later.

“While that may be obvious, there are some less obvious knock-on effects from withdrawing money early – savers may well find that they are not able to continue to save as much as they want or need until they fully retire as they become subject to stricter tax rules.”

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