With over 50 of the UK’s leading pension experts interviewed, the research uncovered some interesting and thought-provoking comments and statistics. The key learnings uncovered by the research were:
- Pensioners need guaranteed income in retirement, most underestimate their longevity, but flexible pensions are expected to introduce a new era of customer engagement;
- More guidance and information is needed for flexible pensions;
- Pension experts agree buy-to-let will form part of pensions strategy for many DB to DC transfers will increase;
- People will draw pension cash beyond their tax-free allowances.
Nigel Pearce, Life and Pensions Director, Equiniti, said: “Whilst the hype of the new pension freedoms has contributed to members engaging more with their pension, which is positive news, there are concerns that people will underestimate their time in retirement and may struggle to get advice. There is also the overwhelming belief that pensioners will still need products that can secure guaranteed levels of income in retirement.
Those with small pension pots are increasingly using the new freedoms to take their whole pots as cash, regardless of the tax implications, to use for a multitude of purposes. The vast majority of respondents agreed that people will continue to draw cash sums over and above their tax-free allowance.
Whilst there are a few who are looking to manage their cash assets, many are simply using them to pay off debts or to make a significant purchase, such as a car. The average DC fund size is only £30,000. It is those with larger DC funds that are likely to be taking independent financial advice and therefore fully understand all of the tax implications involved.”
To read a free extract of the Retirement Survey 2015 please click on the link below to download.