Guidance prior to retirement will improve consumer outcomes for retirees but many would benefit further from regulated advice, according to research from LV showing consumers’ top pension concerns six months after the Budget.
In March this year, Chancellor George Osborne rocked the annuities market by stripping away all caps and limits on drawdown in the Budget.
At that time, Mr Osborne said: “Pensioners will have complete freedom to draw down as much or as little of their pension pot as they want, anytime they want.”
John Perks, managing director of LV retirement solutions, said: “The chancellor’s announcement offers retirees more choice as to how they take their retirement income.
“We believe that the changes will have a positive impact on retirees as it should lead to greater engagement with the industry and better consumer outcomes, as people start to look at alternatives to standard annuities.”
LV’s research revealed the top concerns for those approaching retirement are:
• Will I be better off if I defer taking an income until April?
• Can I switch from a lifetime annuity?
• What are my options now?
• Can I take my money as a lump sum?
• How can I take money from my pension fund now and how much?
• Will I have to pay tax if I take my money as a lump sum?
• What are the tax implications of ending a pension input period early?
• I am using income drawdown; can I now take more from my pot?
• How will my income level be set once GAD has gone?
• I am in a one-member scheme can I transfer out?
Mr Perks added: “The questions that we are being asked indicate that many are keen to take advantage of the pension freedoms. However it is clear that there is an air of confusion as to what those approaching retirement can do now, and what they will be able to do from April 2015.
“We believe that guidance will go some way to improving consumer outcomes for retirees, but many would benefit from regulated advice, and we will continue to signpost and promote the importance of advice.
“We remain committed to working with the adviser community to help them demonstrate the value of retirement advice.”
