Pensions  

Majority of pension savers unaware of new reforms – LV=

Majority of pension savers unaware of new reforms – LV=

Only a quarter of those aged 50 or over plan to seek financial advice about their retirement, a report by LV= has found.

The eighth annual State of Retirement report found there is still a lack of awareness about the upcoming pension reforms, with just a month to go until they kick in.

Its findings showed a third of those aged over 50 do not understand what the new reforms mean while one in 10 is completely unaware that any changes are due to be made.

Article continues after advert

John Perks, managing director of LV= Retirement Solutions, said: “This is a great opportunity for pension savers and the men and women who take advantage of these new rules could significantly boost their income.

“We strongly support Pension Wise and it will no doubt increasingly help make people aware of the options they will have, and encourage them to take advice, to shop around and to consider alternatives to standard lifetime annuities, for example enhanced, fixed-term annuities and income drawdown, or combinations.

Mr Perks suggested a levy on providers who automatically roll their savers over into their pension products would incentivise firms to encourage people to shop around.

The report also found that on average men who have workplace or private pensions reach retirement with pots worth £201,000 while women only have £107,000.

According to the report, one of the reasons for this is that women are less likely to have a private pension than men.

The research showed almost a quarter of women – or 23 per cent – plan to live off the state pension alone after five years.

Women generally know less about the reforms, with 36 per cent having little or no knowledge of them compared to 28 per cent of men.

Adviser view

Justin King, managing director of Dorset-based MFP Wealth Management, said: “It is probably directly related to how big the retirement pot is.

“The reality is that you don’t seek financial advice when you go to spend a fiver, but you might before you spend £1m.”