Consumers have concerns about pension freedoms

Consumers are concerned about the potential risks of taking their pension as cash, a survey by the National Association of Pension Funds (NAPF) has shown.

The poll of private pension holders aged between 55 and 70 found that although 82% see the reforms as a positive change, many are worried by the potential risks.

The biggest concerns voiced among those surveyed were:

  • running out of money before death (63%)
  • being mis-sold products (47%)
  • making bad financial decisions (44%)
  • being targeted by financial scams (36%).

While many retirement savers are positive about the range of options now open to them, 49% are unsure about the best ways to access their pensions. Of those that have made plans:

  • 18% will use income drawdown to access their savings
  • 5% will buy an annuity
  • 4% will withdraw it all as cash
  • 24% will use a combination of these options.

Joanne Segars, chief executive of the NAPF, said:

"It's great news that days away from their launch there's still a high degree of support for these reforms; but savers are also worried about some of the risks as most decisions now fall on their shoulders. It's clear that there's much for the government and industry to do to ensure these fears do not turn into reality."

Contact us if you want to take advantage of the pension freedoms.