Pension plans deserted for ready access
by Gill Montia
Story link: Pension plans deserted for ready access
Scottish Widows has reported that a significant number of people are shunning “traditional” pension schemes in favour of investments that allow them to access their funds before the age of 55.
According to Ian Naismith, head of pensions at Scottish Widows, even those saving for the long-term want access to their money to be more flexibile than allowed with a pension plan.
However, Mr Naismith points out that under current pension legislation, savers have the option of accumulating their money in an individual savings account over a long period of time, before transferring the funds to a pension product.
This could prove attractive to those who have previously seen the property market as a means of funding retirement years.
In a recent survey, Baring Asset Management estimated that 3.2 million UK adults have opted to put their retirement nest-egg into property because they lacked faith in pension schemes.
This group could be at risk from fluctuations in the property market and interest rates; Marino Valensise, chief information officer at Baring Asset Management, urges that “it’s crucial that we plan for our old age and that our investments are diversified amongst a number of different asset classes – not just property”.
The Baring study also shows that 33% of adults are not making any provisions whatsoever for their retirement, with 22% of this group already over the age of 55 and coming towards the end of their working lives.