Why Pension Freedom is costing retirees millions of pounds

There’s no doubt that Pension Freedom has helped many people retire early, as well as taking money from their pension in a way which suits them. It isn’t all good news though. New figures show that despite the increased flexibility, those people who buy an Annuity are still losing out on millions of pounds each year. Research reveals losses The research from Retirement Advantage, shows that in the two years since Pension Freedom started: 50% of people buy their Annuity from their current pension provider Not shopping around will cost pensioners £765 million over ...

Retirement: Warning to people planning to raid their pension

Warning Dynamite Sign Meaning Caution Or DangerSome people planning to take money from their pension have been warned that their plans are “bonkers”. Most people started a pension to provide an income when they finished work. However, figures from Retirement Advantage, have revealed that 24% of pre-retirees, who are still working, plan to take even more money from their pension, despite having already used their tax-free lump sum. The main reasons for taking extra money are: Using it to pay an income (28%) Home improvements (17%) Repaying debt (17%) Boosting savings (28%) It ...

Planning to take money from your pension? Beware of the tax!

Tax problem conceptNew research shows that some people are being hit with surprise tax bills, when they use new rules to take money from their pensions. The report, from Citizens Advice, considered 500 people who had taken money from their pension; 9% had a surprise tax bill, whilst 6% had their benefits affected. Pension Freedom was announced in 2014 and started in April 2015. One of the new rules allows anyone over the age of 55 to take an unlimited amount of money from their pension. People taking advantage of the new ...

Retirement: 8 Annuity myths exposed

Hand drawing Myths or Facts arrows concept with marker on transparent wipe board. Over the past few years Annuities have received a bad press and to be honest, much of the criticism was fair. When George Osborne stood up and delivered his Pension Freedom Budget in 2014, many people predicted the end of Annuities. However, since then two things have happened: Annuities are still a popular option. In fact, latest figures show more people are choosing to use an Annuity when they retire than the main alternative; Income Drawdown Many Annuity providers ...