As the ten-year anniversary of the introduction of Pension Freedoms approaches, new research shows nearly half of pension savers accessed their retirement funds earlier than planned, with many concerned about their long-term financial security.
The research from Standard Life found that the vast majority (79%) of people value the choice and control the Pension Freedoms provide. On average, those who have accessed their retirement funds did so at the age of 60, however, almost half (46%) say this was earlier than planned.
Meanwhile, two fifths (40%) accessed their fund in line with their intended retirement age, while a much smaller number (8%) delayed accessing their funds beyond their original plan.
A quarter (24%) of those who have accessed their pension admitted they worry about whether they have enough to live comfortably, and 11% regret the timing of their withdrawal. A further 9% said they face difficulties in managing their pension funds.
Standard Life said 66% of those who accessed their funds did not seek professional advice, instead choosing to manage their pension independently. Around one in seven (15%) sought advice on an ad hoc basis, while 17% engaged an adviser for ongoing support.
Mike Ambery, retirement savings director at Standard Life, said: “A decade on from the introduction of Pensions Freedoms, many people continue to value the flexibility and control it offers. However, as the initial excitement subsides, some are finding that taking full control of their finances without support can be challenging, particularly when it comes to ensuring their money lasts for the duration of their retirement.”
Ambery said the Government and regulators need to take “positive steps” towards helping people move from complexity to clarity when it comes to making major financial decisions around retirement.
“The ongoing consultation on Targeted Support, if implemented properly, has the potential to lead to an accessible solution capable of guiding people towards the right option for them, whether this be a single product or a mixed approach to suit their different needs as they move through retirement. Ultimately, this should lead to improved outcomes and fewer regrets for retirees,” he added.
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