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An update on the new pension freedoms

With the new ‘pension freedoms’ having come into force on 6th April 2015, we wanted to give Jones Sheridan clients an update on how the system has worked so far, out in the wider world! For those of you who have not yet looked into the pension freedoms, you can read our summary here.

The key thing with pension freedoms is to discuss your requirements carefully with your adviser: making the wrong decision can leave you in a worse situation than that in which you started, so please do get in touch with any questions you might have. Since the pension freedoms came into place in April, pension providers are reporting that as many as 7 out of 10 of the calls they receive are regarding pension freedoms, or are from individuals looking to access their pension. Discussing your requirements with an independent adviser is different to talking to your pension provider, so please do get in touch with an adviser first, before making contact with the company who administer your savings.

The reason for the above is so that we can look at your requirements and make sure that any use of the pension freedoms fits in with what you want out of your retirement, but there are also technical elements to consider as well. As the freedoms have become live, for example, it has become clear that some pension schemes, are not set up to provide the freedoms and can only provide a ‘rock and a hard place’ choice between an annuity, or using the greater flexibilities at a higher cost. It is likely that, as more people use the freedoms, these situations will increase and then solutions will be found, but in the meantime, again, independent advice is vital: we will of course liaise with the scheme on your behalf.

There are positive signs that more people are taking this sensible approach. After an initial spike in individuals looking to access their pensions, recent reports suggest that enquiries are starting to tail off. This is likely to continue as the pension freedoms become increasingly seen as an option for retirees, rather than an opportunity. As with every part of retirement planning, there will be a place for the freedoms, but they are not the only way of ensuring that you get the best use of your pension!

You can view the sources here.