1 in 5 accessing pension savings without understanding rules

Almost one in five (16%) of Britons had accessed funds from their pension savings without understanding the rules before doing so, according to a new report. A worrying 15% of over-55s surveyed by Standard Life said they felt overwhelmed at the options for accessing their pension, with 7% delaying taking from their pension because they did not understand their options. Britons were also worried about running out of money in retirement. A total of 15% were worried that since they have drawn from their pension they will not have enough to live on comfortably. Almost one in 10 (7%) said it has been difficult to manage their pension. However, 10 years on from Pension Freedoms, almost half of the over-55s surveyed (49%) said they like having the choice of how to access their pension in the way they would like, with only 6% saying they did not like having to make this choice. A quarter (24%) said they felt unsure about whether they know and understand the different options and rules around accessing their pension funds, and 13% admitted they do not feel confident about this. Mike Ambery, retirement savings director at Standard Life, said it is clear that over-55s have found the choices on option at retirement “overwhelming” and more needs to be done to provide access to financial advice as a result. He said: “The fact that retirement saving is often not seen as an immediate priority and there’s a perception that pensions can be quite complex has led to people lacking education around and engagement with their pension. As things stand, many also reach retirement with less in their pension than they’d expected, making the decision on how to access limited savings even more vital, and difficult. “Improving access to affordable financial advice is key to improving people’s confidence and chance of securing good retirement outcomes, and we welcome the FCA’s current consultation into the advice guidance boundary. In the meantime, many pension providers give guidance and tools to support decision making at and on the approach to retirement.” Opinium surveyed 2,000 UK adults on behalf of Standard Life between 5 and 8 March.

1 in 5 accessing pension savings without understanding rules

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