Pensions  

Pension reforms: most investors aim to wait and see

Pension reforms: most investors aim to wait and see

Most people will continue to invest their pension fund despite the pension freedoms which were rolled out this week, according to the National Association of Pension Funds.

Joanne Segars, chief executive of the NAPF, said: “Savers are worried about some of the risks as most decisions now fall on their shoulders. It’s clear there’s much for the Government and industry to do to ensure these fears do not turn into reality.”

As part of the trade body’s Understanding Retirement research programme, the NAPF will follow a group of people over the next six months to track savers’ actual experience of freedom and choice.

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NAPF’s programme will explore the impact of the Government’s Pension Freedom reforms on decision-making, the retirement journey and retirement outcomes over the next six months.

Understanding Retirement will then release a final report, to be published towards the end of 2015.

To kick off the six-month programme, the NAPF conducted a poll to get what Ms Segars called “an early indication of their initial intentions and some of the barriers to overcome”.

The poll found that 82 per cent of investors said they were positive about pension freedoms.

However, 13 per cent said they would worry that by withdrawing their pension pot, following the abolition of the requirement to buy an annuity, their fund would will run out of money before they die.

Just under half, 47 per cent, said they were concerned people would be mis-sold unsuitable retirement products and 36 per cent felt people were likely to lose their pension pot in scams.

Nearly half of those surveyed, who were in a defined contribution pension, said they would either wait to see how things work out nearer retirement or are not yet sure what they will do.

Three quarters of the respondents had heard of the Government website Pension Wise. However, nearly a quarter had not heard of Pension Wise at all.

Adviser view:

Scott Mullen, director at MyPensionExpert in Doncaster said: “It does seem to be people with smaller pots are those expressing more interest in withdrawing their money. We make it clear to them the consequences of doing so.”