Have you heard about the new pension freedoms that come into force next month?
Almost one in three people planning to retire this year don’t know about them, reckons Prudential.
Its research shows that substantial numbers of 2015 retirees are in the dark about the changes to pensions regulation announced in the 2014 Budget.
The key change is that those aged 55 and above will be able to take the cash out of their pension pot and do what they like with it.
But the research suggests just one in 50 are considering the so-called “Lamborghini option” of blowing their whole pension pot on a fancy car or holiday.
Prudential’s Vince Smith-Hughes says: “If retirees choose to draw income directly from their pension fund, whether in one big lump sum or over time, it’s important they are aware of the implications on their future income and their tax liability.”
However, research from Citizens Advice reveals that many people are confused about their pension options, not just because of the new opportunities.
There are challenges managing money day to day, as well as planning future finances with certainty and supporting a family.
Gillian Guy, chief executive of Citizens Advice, says: “People want to be in control of their finances and secure financial resilience and independence in older age. But with economic uncertainty, social change and major reform, many are finding this difficult.
“It is vital that they get support to help them understand their pension options, so they can make informed choices.”
