CompaniesNov 12 2015

Consumers must beware the pensions time-bomb

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Consumers must beware the pensions time-bomb

Consumers will always find it hard to manage their spending, which will exacerbate the ticking-time bomb that the UK’s new-found pension freedom has created Samantha Seaton has said.

Ms Seaton, chief executive for financial forecasters eValue, said: “Behavioural finance has shown, time and time again, that consumers find it incredibly difficult to manage their spending.

“I believe there is a ticking time-bomb in the UK’s new found pensions freedom. “While freedoms and flexibility can be a great thing, education is vital to make sure people are saving enough for retirement, and that pensioners do not run out of money too early in retirement.”

Her comments came a week after think-tank the Social Market Foundation published a report showing that pensioners in the US and Australia have not used their pension freedom wisely, with approximately 40 per cent of them spending their pension pot by age 75.

Adviser view

Martin Brown, managing partner of National IFA Continuum, said: “We have a perfect storm for people approaching retirement or at retirement.

“As a modern financial planning business, we recognise that it is our duty to educate our current and future customers on their lifetime planning needs.”