Recent policy announcements in the Budget and Queen’s Speech regarding pension reform have revealed plans for substantial change, creating a need for better education for employers and members of pension schemes, according to The Pensions Trust (a leading third sector UK workplace pension fund).
The Pensions Trust surveyed more than 500 pension scheme members and employers about their major pension concerns.
The survey revealed that the single greatest area of concern was confusion about the options available in the months and years leading up to retirement, with many people uncertain whether or not they could stop working prior to 65 and still draw their pensions.
There was also a lack of clarity about what options were available if people wish to work beyond 65, and whether people are eligible for the state pension if they draw a private pension.
As if that were not enough uncertainty, there was also confusion regarding drawdown and just how much people can take as a lump sum upon retirement.
Chairman of the Trustee Board Sarah Smart explained that Chancellor George Osborne’s Budget announcements on pensions would significantly affect the sector, and stated that The Pensions Trust had welcomed the reforms as they would offer greater flexibility and provide a better quality of retirement for most people.
Smart went on to say that the Government’s proposed free and impartial advice on retirement options could not come soon enough, as the firm’s survey clearly reveals substantial confusion on this front.
She stressed that whilst everyone’s particular circumstances were different, the majority would be best off not taking all their money at once but instead opting for some variety of financial product.