Outflow of monies from Pensions – Savers have withdrawn £1.8 billion from their pensions in two months. This is a massive outflow of monies from pensions and is being withdrawn at an alarming rate of £30 Million per day.
The government is suggesting that this indicates the popularity of the new pension’s reform and that savers now “finally have real control over their hard earned money”.
Charities and industry experts are warning that people underestimate how long they are likely to live AND how long they will need to fund their retirement years.
The treasury is benefitting in the short term as only the first 25% of any pension withdrawal is tax free, the remainder is taxed at the recipient’s marginal tax rate.
The level of pensions’ withdrawal in our opinion is nothing to do with savers taking control over their hard earned money as the government says. If the government wanted achieve that, they should simply stop all forms of direct personal taxation!
It is more to do with the de-valuing of pensions in the eyes of the consumer as the pensions industry has failed to provide clear and transparent information to its customers’ and restricted their fund choices leaving consumers outdated and poor performing funds.
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