Financial advisers in the UK say the number of clients that ignore retirement income guidance in the wake of ‘pension freedoms’ is a concern.
Metlife, an insurance firm, found 22% of advisers had clients who opted not to follow adviser recommendations since the introduction of pension freedoms in April last year.
The pension freedoms increased people’s flexibility over their pension funds, allowing those over 55 years old to withdraw their entire pension as a lump sum, rather than being obligated to purchase an annuity.
The study also found around 87% of respondents said they were worried that increased flexibility over pension funds was leading savers to make mistakes.
Concern about clients running out of money came second only to concerns about consumers facing unexpectedly high tax bills as a result of drawdown. Around 93% of advisers want more clarity on pension taxation.
MetLife’s study of retirement savers suggests these concerns are not without foundation, as 11% of respondents said they planned to take all their pension savings as cash, while 12% were considering turning final-salary scheme savings into cash.
©2016 funds europe