Figures released this week show that April’s pension freedoms, which allow those aged 55 and over to cash in their pensions to release a lump sum, are proving popular – more than £1.8bn has been ‘liberated’ from around 235,000 pension pots in just three months.
Although there have been warnings regarding scammers trying dupe people out of their savings, and some pension providers proving obstructive, it would appear many people are seizing the opportunity to use their pots in other ways. The Association of British Insurers said that in April and May, savers took out more than £1bn in 65,000 cash withdrawals from pension pots, with the average amount taken £15,500.
The figures relating to individuals considering unlocking funds, but have yet to do so, indicated that the trend is set to increase further – according to a recent report, the number of individuals considering unlocking their money from so-called ‘gold-plated’ company pension schemes has surged by around 60 per cent, with figures also showing a big jump in those looking to get their money out of final salary schemes.
Having access to pension funds undoubtedly gives the individual greater control over their money, and offers a myriad of other investment opportunities, however, there are important tax implications that need to be considered and seeking expert advice is critical.
As Chartered Financial Planners, The Financial Planning Group work with our clients in an ongoing relationship, to ensure best practice and to ensure that tax is never paid, needlessly.
If you would like to speak to us about your own financial situation or retirement planning options, please call us on 0800 731 7614 or by e-mail at firstname.lastname@example.org and we’d be delighted to help.