Thursday, 12 July 2018 13:12

Pension Freedoms are reshaping retirement plans

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Andrew Tully of Retirement Advantage Andrew Tully of Retirement Advantage

New research has found that 1 in 5 pension savers (20%) over 50 have changed their retirement plans because of the Pension Freedoms as the retirement planning sector sees a major change in direction.

The survey also found:

·         44% of these people plan to retire earlier

·         29% plan to work part-time in retirement

·         28% plan to retire later

Retirement Advantage, which commissioned the research, described the behaviour as ‘demob fever’ as official statistics show most  consumers (72%) who access their pension pots did so before age 65, the traditional retirement age.

Of the 1 in 5 who have changed their plans, 44% were planning to bring forward their retirement and retire early (21% said by between 1 and 3 years and a further 23% were planning to retire at least 4 years earlier).

However, 28% of respondents said they were now planning to retire later (13% by between 1 and 3 years later, while 16% said by at least 4 years).

Nearly a third (29%) of people changing their plans were aiming to work part-time in retirement although the data showed a marked difference between men and women who have changed their plans.

While 41% of women over 50 anticipated working part-time in retirement, only 20% of men planned to do so. Meanwhile men expected to retire one year earlier on average, while women did not envisage retiring earlier on average.

Andrew Tully, pensions technical director at Retirement Advantage, said: “The increased awareness around pension flexibility has certainly made people sit up and rethink their retirement, with a significant number changing their plans as a result.

“Official data shows most pensions are now accessed before state pension age, which demonstrates what a game changer the Pension Freedoms have been.

“The regulator has recognised the need to alert people to the fact that your 55th birthday should not necessarily be a starting signal to begin accessing your pension.”

Retirement Advantage’s annual Retirement Sentiment Index is based on Censuswide polling conducted in March, surveying 1,003 UK adults aged 50 and over who are not retired and have a defined contribution or individual pension in place and are involved in financial decisions.

 

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Last modified on Thursday, 12 July 2018 15:13
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