Pension withdrawals can be made from age 55 for most private schemes. Private pensions generally provide a lot more freedom when compared to state pensions which can only be received at 65 at the earliest.
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This freedom could be utilised to the utmost degree in the coming months according to analysis from Just Group.
They detailed that a record 940,000 or so will reach 55 over the coming year.
However, of the 650,000 pension pots accessed for the first time in 2018-19, 400,000 were accessed without regulated advice, of which more than three in four were taken without a guidance appointment.
This is a worrying statistic, especially considering that pension guidance can be received for free from the likes of Pension Wise and the Money Advice Service.
The Money and Pensions service are currently running trials into improving take-up of guidance and the results are expected to be published later this month.
In anticipation of the results, Stephen Lowe, Just Group’s Communications Director, commented on what should be done in light of the findings.
As he detailed: “In the coming weeks we expect to see the results of trials undertaken by the Money and Pension Service to find ways to improve guidance take-up.
“Once the report is published the next step will be for FCA to publish or consult on proposals but no timeline has been set for this.
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“The FCA now has a unique opportunity to ensure receiving free and impartial guidance becomes a new norm by setting an approach to ensure far more gain from the valuable guidance than miss out on it.”
The need for effective guidance for pension matters, has also been highlighted by Fidelity International.
The financial services organisation found that women in particular are facing difficult outlooks with their pensions and savings,
In their recent “Financial Power of Women” report, it was found that over half (54 percent) of women were concerned that they would not have enough to live comfortably in retirement.
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This concern is not unfounded when taking into account recent statistics collated by the Pensions Policy Institute.
They found that women in their 60s will, on average, retire with £51,000 of savings compared to men who on average will retire with £156,000.
Generally people have six options for taping into their pension pots.
For those who don’t need to retire or simply don’t have enough to retire, they can leave the whole pot untouched, which will hopefully allow it to grow further.
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