Craig Mcconnon - More People Taking Advantage of Pension Freedoms


It has been revealed that more people are taking advantage of the pension freedoms being offered in the United Kingdom as Britain's annuity market faces certain death. This is based on experts who have used official figures released on 8 September 2017 as sales continue to drop.

Pension Shackles

It has been more than two years since George Osborne released pension shackles and the number of people who are accessing lump sums is on a steady rise. The Financial Conduct Authority (FCA) recently released a six month data report revealing the new trend.

There was a nine percent increase in the number of pension pots being accessed for the very first time and the new draw down arrangements were increased by four percent. The concern is that annuity sales have dropped dramatically by a staggering sixteen percent in six months, which is a sign of concern.

Investors Not Taking Advantage of Guaranteed Outcomes

The data showed that draw down demands are outstripping annuities by three to one, which is worrying statistics. It is also a sign that investors are not invested in guaranteed outcomes with the low interest rates being offered today. If this continues our annuity market in the UK may not exist moving forward, something we need to look closely at to identify how to rectify the situation without delay.

For those older residents that don't have a guaranteed income is a serious concern. The data did show us how people are using their pension freedoms and while annuity sales continue to decline even with low interest rates, draw downs continue to soar due to the flexibility that they provide.

It is important to remember that you can change your provider at any time, but it’s important to also bear in mind that buying annuities is a once and decided decision. The good news is that it does show that people are using the freedoms provided in a sensible manner.

Advice


We do recommend that anyone thinking of taking advantage of their pension freedoms should discuss the options with their financial advisor. It is important to know of any penalties and charges which may be applied to reduce the risk of the person finding themselves losing money in the long run.

Comments

Post a Comment

Popular posts from this blog

Retiring This Year? You Could Receive Almost £20,000 Per Annum!

Image
Those retiring this year can enjoy £1,200 more than those who retired ten years ago. While this is the case, which pushes the pre-tax income to £19,900 per annum, there are still those who have not planned and saved for their retirement years. In fact, forty six percent of those retiring feel that they are not financially prepared for giving up work or they are not confident in the preparations that they have made. Those who retired last year, were receiving £18,100 per annum, which has now been boosted to just below £20,000. Final salary pension schemes which provided retirees with a generous inflation proof income have become far and few between these days with only a half of all employees who are nearing retirement being in the position to have an income which will ensure a comfortable retirement. Twenty seven percent of these soon retired persons believe that they don't have enough pension to retire comfortable in the long run. Our biggest concern here a...
Read more

PWS Group - Five Effective Tips to Rid Yourself of Debt

People of all ages find themselves in debt from time to time. From credit cards to loans and even mortgages, most people owe some money somewhere. Sometimes the debt can become too much, especially if you find yourself on the verge of being retrenched, then your income is going to disappear and paying back these debts is going to be even harder than anticipated. Also remember at any age, you want to be saving for your retirement, something you should be looking at from the day you start work. Stop Borrowing Money Today The very first step to getting out of your debt quickly is to top borrowing. Often you will find you use your credit card as you near the end of the month so you can continue your current lifestyle. Not using the credit card may mean you cannot go out this weekend or you cannot buy the new furniture you wanted straight away, but you won't be borrowing more money and therefore it will help you pay back the debt much faster in the long run. Set Up ...
Read more

Are You Prepared to Work Longer Than Anticipated to Ensure a Comfortable Retirement?

Image
There has been quite a reshuffle when it comes to retirement age in the United Kingdom. It has gone as far as Chancellor Philip Hammond possibly using the November 22 Budget to refocus on the balance between young and old, getting the younger to pay for the older so that they can benefit. The concern is that official data has suggested that the elderly are already working for longer than they anticipated to ensure their financial security before retiring. This is becoming a common trend and we are seeing our older generation working longer and longer in order to secure their financial security, bridging the gap between an inadequate pension pot and a longer retirement. In fact the Department for Work and Pensions in the United Kingdom released statistics who show that the average retirement age has exceeded sixty five for men for the first time and women are closing in very quickly. There are more than one in ten men working over the age of seventy, while eight ...
Read more