Over half of providers are still undecided
Xafinity, one of the UK’s largest pension consultancies, recently conducted research on 80 occupational pension schemes to find out who would and wouldn’t be offering the new freedoms in April. The results are less than encouraging for those hoping to take advantage of the changes straight away:
- 58% of providers are undecided about whether they will offer savers access to the new freedoms
- 15% have already ruled out the possibility
- 5% will allow savers to take their whole pension as a lump sum
- Only 2% are planning to offer the full range of flexibilities through drawdown
These figures paint a very different picture to the freedom and flexibility promised in last year’s Autumn Statement. Matters become even more complicated if, like many people, you have changed jobs several times and accumulated a number of pension pots over your lifetime. Even if one of your providers offers the new flexibilities, the others may not and you could find your plans in disarray upon retirement.
Pension freedoms are not a legal requirement
With so much positive publicity surrounding the new rules since they were first outlined in the 2014 Budget, many savers will be unaware that there is no legal requirement for providers to offer unlimited access to pension pots. Costs, risks and operational issues are also reasons that some providers may choose not offer the new flexibilities straight away. Others may simply not have the time to implement the changes before 6 April.
This could be bad news for many of the UK’s savers, although it will not always be in your best interests to take advantage of the new freedoms. For example, you may prefer the security of purchasing an annuity, or you could be taxed heavily if you withdraw too much of your pension at once. If you’re unsure about the best course of action, call us on 020 7189 2400 and one of our qualified financial planners would be happy to help.
The Best SIPP gives you complete control
If your provider will not allow you to take advantage of the new rules on 6 April, you could transfer your pensions into a Self-invested Personal Pension (SIPP) like our award-winning Best SIPP and get immediate access to your savings*. Not all SIPP providers will offer this freedom, but at Tilney Bestinvest we have worked hard to ensure that we can provide this functionality immediately.
As well as giving you complete control over how you access your savings, the Best SIPP also offers a wider choice of investments and the opportunity to manage them for yourself. And if you don’t have the time or inclination to manage your own retirement investments, at Tilney Bestinvest we have a range of investment advisory and management solutions available from as little as £500.
For more information on the pension changes coming into effect on 6 April, or to consolidate your pensions in the Best SIPP today, please contact us on 020 7189 2400.
This article was previously published on Tilney prior to the launch of Evelyn Partners.