Comment on 10th anniversary of pension freedoms announcement

Commenting on the 10th anniversary of Chancellor George Osborne’s speech announcing ‘pension freedoms’, Kathryn Fleming, Head of DC At-Retirement Services, Hymans Robertson, said:

“The pension freedoms have been a minefield for many members.  Many savers know it’s a serious decision they now have to take, but they’ve been wrestling with where to get information and who to trust. The tax-free cash has also given relief from short-term financial pressures, but it may come at a longer-term cost, and occasionally with a tax bill.

“The combination of pension freedoms and the current low average DC pot sizes means that DC savings are thought of as ‘money’ not ‘pension’. That really changes how members use their savings – with around only 10% of pots accessed since the introduction of the freedoms being used to buy annuities. That increases the pressure on the industry to get the guidance and advice support right.

“In the next 10 years DC savings assets will increasingly become the main source of income for retirees. This means that pension freedoms could be a powerful tool allowing members to personalise and maximise their retirement incomes, by being able to flex and intertwine them with other savings and assets. But this will only be feasible if they are accessed with appropriate support.”

Kathryn Fleming’s blogpost “Reflections on the 10th anniversary of pension freedoms announcement” can be read here.