New Pension Freedoms – £7.6 billion released since last April
The new Pension Freedoms introduced 18 months ago, have helped highlight the fact that people aged 55 or over are able to release money from some or all of their pension pots. While people haven’t been compelled to buy an annuity for a while now, the Pension Freedoms have given customers more flexibility to do with their pension fund as they wish.
According to data from the government *, over £7.6 billion has been paid out from pension pots since the new rules were introduced in April 2015. Over half of this has been released via cash lump sum payments, with most of the remainder being paid out from flexi access income drawdown contracts.
So what are people doing with this money that they are withdrawing? It appears that around 1 in 5 people are taking money out of their pension to pay off debts. And there is little evidence that the former pensions minister’s prediction that people would “blow their funds on Lamborghinis” has come true.
But the scale at which people are cashing in funds meant for them to live on in retirement, will renew concerns that people are leaving themselves without adequate money for their old age.
However if, having weighed up the risks and benefits of releasing money from your pension fund, you would like to know more about your options, then please get in touch. We can help you release your tax free cash, or a further lump sum or regular income from your pension using flexi access drawdown. We will give you a free no obligation quote and a full information pack which includes all the things you should think about when releasing money from your pension pot.
You can visit our website www.flexi-access-drawdown.uk or call us on 020 33 55 4827. We are here to answer whatever questions you may have.
[*] www.gov.uk/government/news HM Treasury 27/10/16