Contrary to the Dispatches programme on Channel 4 on 12 January, our own very recent research reveals that fewer than one in 10 people aged 55 and over plan to cash in their pension. Indeed, the majority, 65 per cent, stated they had no intention of cashing in their pension and 25 per cent said they were unsure of what to do.
Based on our data, it appears highly unlikely that ‘two million’ will be emptying their pot. Our own experience, which was supported by our independent research, shows that those who are looking to cash in their pension will be doing so for prudent financial reasons: more than a third are looking to use the money to clear their existing mortgage or debts, a fifth want to make home improvements, 14 per cent would be investing the money elsewhere, 11 per cent taking a holiday, 9 per cent helping their children. Only 7 per cent were going to blow their pension on a new car, with no mention of a Lamborghini incidentally.
However, I agree that for a significant number of people the new rules have just added another level of confusion to an area they already do not feel they understand, and has provided even more opportunities for the hapless investor to be ripped off by the unscrupulous. In short, the message to anyone considering using their new pension freedoms is to get proper independent professional advice first.
Portal Financial, Rochester, Kent