Today's Budget promises to expand the pension freedoms outlined in last year's big announcement. However, it seems that the majority of people in the UK are still largely in the dark about the changes that are set to come into force on 6 April, meaning many could face confusion when it is time to make plans for retirement.
According to research by Octopus Investments, a shocking eight in 10 adults are unaware of the very basic facts behind the pensions shake-up. When presented with a series of statements about the reforms and asked to pick which ones were true, only a few respondents were able to correctly identify that all of the statements were in fact correct. Even more worryingly, this trend continued among respondents aged 55 and over, who are the closest to retirement age and stand to be affected by the changes sooner.
Commenting on the results, Simon Rogerson, CEO of Octopus Investments, said: "The upcoming pensions revolution is the biggest shake-up in terms of financial planning that Britain has seen for decades.
"These reforms are far reaching and have implications on financial planning not just for those approaching retirement but for generations to come. However, our findings show that the vast majority of the public are still not clear on many of the basic changes that underpin these reforms.
"It is time for people to seize the opportunity the Government has presented and take action, seek advice and start to think differently [when] planning for their retirement."
If you are one of the many who are a bit hazy on the details of the new reforms, then it is time to get a clearer view. Form 6 April, the Government's Pension Wise service will be in operation. This service will offer free guidance to those retiring and will help to outline the choices that are available, making it an ideal first step to making an informed decision about your pension.
Consulting an independent financial adviser is the next crucial step. An adviser can provide you with tailored advice that will help you to make the most of your assets. This is the best way to make an informed, confident decision about your retirement income.
Once you know which options will suit you, you may like to take a look at our annuity planner to see if this is something that you can benefit from.
Whatever you do, make sure you get as much guidance and advice as you can before you make a decision - don't be left in the dark!
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