The pension reforms are rapidly approaching, but how much do you know about them? Well, if a recent survey is anything to go by, you may not be fully clued up, with the figures showing that just 22% of respondents are aware of the flexibilities set to be launched in April.
The research, from Octopus Investments, found that a worryingly small number of people were aware that those aged over-55 could access their pension savings flexibly after April, with six in 10 respondents not aware of some of the basic facts around the reforms. It doesn't improve much when asking that particular age group, either, with just 29% of those aged 55+ aware of the new possibilities.
Furthermore, only 25% knew that they were entitled to free guidance to help them make sense of their financial options at retirement, and that means a large number could miss out on this level of support. Potentially, this could mean they risk making poor choices, something that could affect their income throughout retirement.
Simon Rogerson, CEO of Octopus Investments, commented: "The upcoming pensions revolution [means] the Government is handing back control to people and unlocking a range of options for retirement, however our findings show that the vast majority of the public are simply not clear on many of the basic changes, including the fact that that they can seek guidance on the different choices now open to them.
"There's a very real need for all those involved in these changes to close the knowledge gap and help people to really get to the bottom of what their financial future might now look like. [On a personal level], it is time for people to seize the opportunity the Government has presented and take action, seek advice and start to think differently planning for their retirement."
There's clearly a need for the Government to increase awareness of the reforms and the new options available to retirees, particularly given the fact that just 3% of consumers know that the Government's free retirement guidance service is called Pension Wise. But, it's important for retirees themselves to get clued up, too.
The changes offer more flexibility around how you can spend your pension than ever before, but with choice comes complexity, and it's vital to make the right decision. After all, it'll determine how much income you'll receive for the rest of your life, so doesn't it make sense to choose wisely?
So, it's time to start the process! If you're not at all sure what the reforms mean, start with the basics. Read up on the six things you need to know about the changes, and if you're approaching retirement and need more advice, read our guide on Pension Wise so you know what to do next. Alternatively, if you're one step ahead and are ready to consider your options, consult our annuity planner to find ways to maximise your income throughout retirement. Above all, arm yourself with suitable knowledge of the reforms, and you'll be well equipped to make the right decision.
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