One of the largest independent financial advisory organisations says that one in three of clients have ‘actively enquired’ about raiding their pension pots.
deVere Group, which has around 80,000 global clients, says that although their clients have shown an interest, the apparent unwillingness to break into their pension pots for a one-off payment is a good thing.
The Senior Technical Advisor at deVere Group, Reece Fallaize, said: “Some commentators have been publicly hailing the scrapping of restrictions to pensions access as a victory for freedom and choice for savers.
“It is this misguided rhetoric, the huge amount of media coverage that this policy has received, and presumably the novelty factor of limitless pension access, that is driving the surge in enquiries on this matter.
“Since the Budget, we estimate that a third of all clients who have a pension have actively enquired about cashing in their pensions.
“Many are initially attracted to the propaganda surrounding this policy, but when confronted with the reality, quite rightly, ditch the notion.
“Once clients are advised on the true implications of accessing their pensions, the vast majority, probably around 95 per cent, decide against the idea of cashing in their pension in favour of a more traditional drawdown method.
“This is because after the first 25 per cent which is tax-free, the rest would be subject to income tax.”
“We share the Financial Conduct Authority’s concerns that some individuals might not necessarily have the financial literacy to always make the most informed decisions. Mistakes with retirement planning can be extremely costly on many levels, for the individual and their families as well as the State, and often incredibly difficult to overcome.”
