The government has suggested that around 540,000 will take advantage of the pension reforms that come into effect on 6 April.
Chancellor George Osborne previously stated the figure would be around 320,000 when he announced the changes at the Budget last March, stating that retirees would get the access their pension pots through a variety of options and without being hit with punitive tax rates.
Individuals will also be able to pass on their unused defined contribution pensions to a nominated beneficiary when they die, instead of paying the 55 per cent tax charge which currently applies.
Since the introduction of the interim freedoms in March last year, when the government made it easier for people to access their pension savings flexibly or withdraw a lump sum, industry data showed that sales of flexible pension pots have more than doubled.
Despite this trend, recent research from LV found that only a quarter of those over age 50 plan to seek financial advice in the lead up to their retirement, emphasising the need for Pension Wise and the government’s campaign to raise awareness of the pension changes.
Mr Osborne commented: “It is hugely exciting that our freedoms are now only a month away. We are giving people real choice over their money and enabling them to make important decisions for their future.”
ruth.gillbe@ft.com
