Third of over-60s clueless about pension freedoms

Third of over-60s clueless about pension freedoms

Almost one in three working over 60-year-olds are oblivious to historic reforms enacted a year ago, giving them total freedom with their pension pots, according to research.

Tomorrow (6 April) marks the first anniversary of government changes to the pension rules for over-55s, which has seen them gain immediate access to £6bn of their retirement savings in the last 12 months, according to ABI figures out in March.

But research by financial services group Sanlam has pointed to widespread ignorance of the rules, despite high-profile media coverage.

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In a poll of 1,000 non-retired UK over-60s, the firm found almost 29 per cent of them were unaware of the reforms, with three quarters saying they “haven’t affected their retirement plan at all”.

Over half said they have yet to start considering their financial plan for retirement, while 39 per cent admitted they do not know value of their pension pot – a figure which increased to 50 per cent for women.

The findings raise questions about how the changes have been communicated to the public, with 15 per cent of those polled by Sanlam stating retirement plans are too confusing for them to know where to start.

Last month, select committee MPs criticised the government over its communication of changes to the state pension, saying “neither the winners nor the losers know who they are”.

Nick Parry, director at Sanlam UK, said far from being enlightened, the research pointed to a significant “disengaged” proportion of the non-retired population.

“It’s clear that more education and guidance is needed urgently to ensure that people feel confident about their retirement,” he said. “The freedoms will only work for this and future generations if as much time, energy and funding is put into education and engagement as it is to freeing up the ‘at retirement’ choices.”

Mr Parry called on the government to speed up the implementation of recommendations in the Financial Advice Market Review that would make advice more accessible.