Calls have been made for the government to extend the current limits on pension freedoms.
Many consumers are unhappy that they are unable to unlock their retirement fund early under current rules. They believe their options to increase their pension pot is being restricted.
A movement called ‘Your Pension, Your Choice’ has urged the government to change the rules surrounding pensions. Currently, people who retired before April 2015 do not have access to pension freedoms.
The movement claims that individuals were forced to buy an annuity. They say that these are “low paying”. Also, they “restrict the ability of retirees to access their pension pot”.
Drawdown used to be the preserve of wealthy pensioners. However, since the introduction on pension freedoms, millions more pensioners have kept their funds in the market. Due to the wider options, they are now less likely to buy an annuity with a fixed income.
According the the campaign, savers have cashed in their pension pots for more than £9.2bn since 2015.
Since April 2015, people aged 55 and over have been able to access their pension early. They can choose to withdraw a lump sum from their pension pot before they retire. Many choose to invest in an attempt to increase their retirement fund.
However, pension freedoms were not welcomed by all. Some felt that the changes gave them too many options and left them vulnerable to pension scams.
Impact on the workforce
Following the changes, a third of financial planners have reported an increase in people seeking retirement advice. Two-thirds of the workforce are also concerned that their pension will not last.
While freedoms gave people more options for investing their pension, the majority of people do not have the expertise in investments or retirement planning to make the decisions on their own. This has left many open to financial mis-selling.
Read more on the impact of pension freedoms and mis-selling here.
If you unlocked your pension early and were mis-sold a scheme, get in touch. Our team of experts can offer support and advice on a no win, no fee basis.