As of 6 April 2015, UK pension changes has now made it that people aged 55 and over have access to their pension pot, giving them full discretion over the use of their retirement funds.

People over 55 can withdraw the full amount from their pension, of which 25% will be tax free.

A survey into how savers will use the new freedoms of the UK pension changes, conducted by YouGov and investment company Tilney Bestinvest, which covered 2,311 people over the age of 50, indicates that just 12% planned to withdraw all their funds within a year, with 6% intending to take out more than £20,000.

The survey also found that 16% plan to spend some of their funds on a holiday, 10% planned to buy a car, 23% would make new investments such as Isa’s, 11% would pay off their mortgage, 8% would clear other debts, and around 15% said they would help their children.

This differs from the research for ABTA by Arkenford Ltd who specialise in tourism and leisure market research, which covered 201 people aged between 55-74 years old.

The survey revealed that 20% would consider taking cash out of their pension and a further 15% were still undecided.

Of those considering taking money out of their pension pot, 35% would spend some on a holiday or travel, 31% would make home improvements, 24% would pay off existing debts, and 18% would consider using pension money to help other family members.

With an estimated ½ million people being able to benefit from the new freedoms of the UK pension changes, there will be the need to make some choices which will affect your income and standard of living for the rest of your life.  You need to calculate how much money you need to live on, and how healthy you are. What will you do with your cash-free lump sum?  Deciding what to do with your fund is very important because that money will need to last you for the rest of your life. That is why it is important to get proper impartial advice who can take you through all the options.

UK Pension Changes Advice

If you would like information about the UK pension changes and how it could affect you, call us on +34 698 243 745 or Contact Us Today.