Pension Freedom or Pension Poverty ? – New research published points out the downsides of pension freedom and calls on the government to identify emerging risks both to consumers and taxpayers.
The report, Golden Years? What freedom and choice will mean for UK pensioners, provides a stark warning and remarks upon the Australian and American pension freedom experience – that the majority of pensioners who chose to take monies out of the pensions early and lived to regret doing so.
Indeed almost all the pensioners suffered hardship, either because they were far too cautious and withdrew very little out of their pension, or the opposite – people who extracted monies far too quickly!
The implications for UK pensioners is that they will mirror these behaviours and this is likely to have two consequences , one for the pensioners as they are likely to face severe hardship at some point in life, two for the taxpayer who will have to pay for an increase in the level of benefits.
We understand that the Australian government is likely to reverse its own pension’s freedom legislation.
I predict that the UK government will also make changes to the new pension’s freedom reforms, the most likely of these changes is too push back the age at which one can extract monies from pensions to age 65.
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