Research from United Kingdom retirement specialist Age Partnership shows a majority of UK citizens older than 55 approve of pension freedoms.
Almost two out of three (65 per cent) believe the concept was one of George Osborne’s top ideas while 47 per cent have considered accessing their retirement savings through the concept.
In 2015-16 pension freedoms raised £1.5 billion, with information from the federal government suggesting the program has been more popular than expected. Some of the most popular goals for the money are entering into a drawdown or purchasing an annuity (close to 75 per cent), and DIY investments (39 per cent). Close to one in three will pay off existing debts while 25 per cent plan on splurging on the following items:
- Global travel (28%)
- New car (15%)
- Home improvement (13%)
- Private healthcare (10%)
- Holiday home (8%)
- Hobbies (7%)
- Treating grandkids (6%)
- Part-time job (5%)
- Antique investments (5%)
- Cosmetic surgery (3%)
It is best to exercise caution when considering the use of pension freedoms, Age Partnership head of pension income Simon Green advises, especially in light of the fact one-third of respondents said they’d consider accessing their pensions but do not know what for.
“There’s a natural urge to live in the moment, especially when you retire and are encouraged by friends and family to simply enjoy life. Yes that’s important, but we’d remind everyone that it’s a marathon, not a sprint and to consider all your options before accessing pension freedoms.”
There are other concerns. More than half believe pension freedoms have made pensions more complicated while 22 per cent do not know where to obtain strong advice. Only one in six know the difference between an annuity and a drawdown.