With just three weeks until the UK embarks on a new chapter of pension freedoms, research shows that almost half of those people facing critical retirement decisions are unaware of the Government’s new guidance service, Pension Wise.
The poll, commissioned by retirement specialist MGM Advantage, reveals that much work needs to be done to bring this critical element of the new freedoms to the public’s attention.
The full Pension Wise service will launch on 6 April 2015 to coincide with the Government’s pension freedoms, announced as part of George Osborne’s 2014 Budget. However, the research, conducted by ComRes, shows that 47% of people aged over 55 are not aware of the service. Only 12% of respondents stated that they were fully aware of the new service and 41% said that although aware of the service they did not know the details.
Andrew Tully, pensions technical director at MGM Advantage, said:
‘We are nearing a critical time for those considering their retirement. The world will change for pensions on 6 April this year. This will give people greater freedom to use their saved pension pots than at any other time. But with fewer restrictions and greater choice, things can get more complex. Understanding the options available is therefore vital if people are to make the best use of the money they’ve saved. Most will need help if they’re going to maximise this opportunity and minimise mistakes.
‘For a lot of people this means getting guidance via the new Pension Wise service. With only a short time to go before the changes, many people, and possibly up to half of the 400,000 people that retire each year, are unaware of the help available.
‘This is concerning, as there is real potential to make decisions that will cost those at retirement. People need to help themselves and seek out this guidance – it’s free for a start. However, it is vital that the Government ramps up its awareness programme so that people know where to look.
‘In their search for answers to the new pensions puzzle people should also consider seeking out professional help from a regulated financial adviser. This route goes further than the Pension Wise service, which although valuable, will still leave people needing to work out which options and products are most suitable for their own personal circumstances.’
The Pension Wise service aims to provide those at retirement with an understanding of their new pension options. There is currently a website ( www.pensionwise.gov.uk) to support the service, with phone and face-to-face guidance coming soon.
Research was conducted by ComRes with 1,000 UK residents aged 55 and over who are not retired. Data were weighted to be representative of the known profile of UK adults aged 55+ who are not retired. The fieldwork was carried out online between 27 February and 5 March 2015.
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