Since the chancellor, George Osborne announced the government’s new Pension Freedoms in 2014, savers have withdrawn over £1 billion from their pension funds.
In response to questions in parliament, Osborne said 60,000 people had made use of the new freedoms, which allows savers to access their whole pot from the age 55.
It’s the first time the government has disclosed information on the uptake since the new rules came into force in April this year.
‘These unprecedented freedoms have been widely welcomed,’ said Osborne. ‘So far, in the first few weeks since they came into effect, 60,000 people have made use of them. More than £1 billion has been transferred out of people’s pension funds as a result.’
‘It is a sign that this is a real success, but we have to make sure people get the best advice, that the market responds and that companies up their game in helping customers make use of these freedoms. We will be watching these things very carefully.’
Osborne’s comments are a further sign of government pressure on pension providers, after Iain Duncan Smith, secretary of state for work and pensions, threatened to ‘name and shame’ providers who did not offer savers success to pension freedoms.
We read earlier this month that Friends Life had made the headlines after writing to customers saying it would not be offering ‘flexible drawdown’, a means of savers taking out money as often as they like, reversing an earlier decision.
Flexi-access Drawdown offers customers the freedom to take money from their pension as and when they like. Your money will still be invested so you need to take advice as there is a risk your money could run out in retirement.
A Pension Annuity is still the only product available which provides you a guaranteed income for the rest of your life.
Contact us today to see if we can help you on 0800 098 7050.