Pension freedoms boost interest in saving

Three years on from the introduction of pension freedoms rules people in the UK are saving more for their retirement, according to research.

The research by Prudential revealed more than one in ten working over-55s said they had started saving into a pension for the first time, encouraged their partner to save more, increased pension contributions or restarted pension saving since the rules came into effect.

One in seven said they were making more effort to learn about retirement savings and about 12% said they or their partner would work full-time or part-time past their original planned retirement date. 

But more than a third were concerned about running out of money during retirement and nearly two thirds of over-55s said they were confused by the regulations.

Vince Smith-Hughes, a retirement income expert at Prudential, said the reality of pension freedoms had hit home but that people should take a long hard look at how much they should be saving to ensure they have the retirement they want.

Smith-Hughes said: “Previously most people bought an annuity to guarantee an income for the rest of their lives. Now they can drawdown as much money as they like but the risk is that they run out of money in their lifetime.”

He added: “The fact that many over-55s are preparing to work longer and save more highlights that they recognise this risk and a responding in a rational and responsible way.”

©2018 funds europe

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