Pension freedom? Never heard of it

Tuesday 1 December 2015

• More than 3.4 million over 50s1 still haven’t heard about April’s pension revolution • A third say they’re aware of the changes but are bamboozled by them1 • Just 6% of over 50s1 have sought expert help since the reforms kicked in • Saga Investment Services: “For too long, many people who could benefit from financial advice have been ignored by the industry. The Government must tackle the problems that have left over 50s out in the cold and open up the world of financial advice to the masses”

Pension freedom? Never heard of it

Almost one in five over 50s (17%) - equivalent to 3.4 million people - say that they’re still completely unaware of their new powers to draw as much as they like from their pension from the age of 55, according to new research released by Saga Investment Services.

And despite countless headlines, multi-million pound Government advertising campaigns and almost £5bn withdrawn from pensions since April2, a third (30%) admit they are still confused by the pension reforms - yet just 6% have sought out professional financial advice to help them manage their pension in retirement. 

The findings suggest that over 50s have a widespread lack of confidence in dealing with their retirement savings. Just a quarter (28%) reported that they feel more in control of their money as a result of the changes, while more than half (56%) are now worried about how they will afford retirement.

Saga Investment Services is calling for the Government and regulators to pave the way for radical changes to help people make the best decisions in retirement. It believes the outcome of the Financial Advice Market Review3 has to introduce flexibility to existing rules and champion innovation which gives over 50s access to retirement advice in an affordable way.

At the same time, it’s vital that the Review also ramps up financial education for all consumers, and tackles the jargon and hideously opaque pricing awash in financial services, which stops people engaging with their finances and seeking the advice they need. Saga will publish its response to the Review in December.

Nici Audhlam-Gardiner, Managing Director of Saga Investment Services said:

“It’s extremely concerning to find that so many over 50s simply don’t know about this huge change to the way they can access their savings, or remain baffled by the reforms. With people spending longer in retirement and living longer overall, their money is going to need to stretch further than they might expect. Our findings suggest that today’s over 50s could be putting their savings in jeopardy without assistance.    

“For too long, many people who could benefit from financial advice have been ignored by the industry. The Government’s review is a fantastic opportunity to tackle the problems that have left over 50s out in the cold and open up the world of financial advice to the masses.

“Saga Investment Services has been launched to help over 50s make the most of their money in retirement, offering online and telephone guidance six days a week, educational guides and tools and a commitment to plain English – along with publishing its fees in full. With access to face-to-face financial planning and telephone-based advice, we’re here to help the over 50s meet their retirement goals, big and small.”

- Ends -

Notes to editors

  1. Populus, on behalf of Saga, based on a representative sample of 1,931 over 50s between 7 and 11 October 2015. Populus is a member of the British Polling Council and abides by its rules. Extrapolation to Great Britain population aged 50 and over and uses ONS mid-year 2014 population estimates.
  2. See www.abi.org.uk/News/News-releases/2015/11/Pension-Stats-six-months-on
  3. The Financial Advice Market Review will examine the advice gap for people who do not have significant wealth; the regulatory barriers firms face in giving advice; emerging technological innovations for financial advice; and how to increase demand for financial advice. The consultation closes on 22 December 2015.

About Saga Investment Services

Saga Investment Services has been developed to open up the world of investing and financial planning to the UK’s over 50s in the run up to and throughout retirement, and to make the process as simple and stress-free as possible. Customers can invest from just £100, and have access to investment advice and financial planning services. Saga Investment Services champions a straight forward and transparent approach to investing, and is a proud member of the Plain English Campaign. It is a joint venture between Saga, the leading provider of services to the nation’s over 50s, and Tilney Bestinvest, the expert investment and financial planning group.

 

IMPORTANT INFORMATION

The value of investments, and the income derived from them, can go down as well as up and you can get back less than you originally invested. 

This press release does not constitute personal advice. If you are in doubt as to the suitability of an investment please contact one of our advisers. Past performance is not a guide to future performance

The decision to access your pension is an important one and will affect your income and possibly your standard of living for years to come. In light of the new pension rules, before any decision is made on how you access your pension, we recommend you receive regulated financial advice or get free guidance from Pension Wise (www.pensionwise.gov.uk).

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