“Balancing ongoing spend and investment decisions in order to make a pot last a lifetime and cover potential expenses such as care needs is a complex task.”
The ABI warned the true impact of pension freedoms will not be known for decades as many of the current generation of retirees benefit from final salary pensions, which provide a guaranteed retirement income while also being able to use other pension monies flexibly.
But defined benefit schemes are in decline therefore future generations will have to rely on pension savings without such guarantees to provide their income.
The ABI stated: “This makes it vital that they can access guidance and advice to help them make such decisions.”
Mike Morrow, wealth and platform director at Openwork, said: “Unfortunately, many consumers still don’t fully appreciate how valuable a pension is and the increased flexibility and choice that came with the freedoms in 2015 can be perceived by consumers as complex, especially without the right guidance.
“Pension plans are now different, and the rules are now different – they are a savings vehicle that can be adapted to meet the different needs of individuals in retirement. It is important that consumers seek financial advice to ensure that they are fully aware of the options available to them during retirement.”
What do you think about the issues raised by this story? Email us on email@example.com to let us know