Prudential commissions new independent consumer guide to pensions freedoms

01 December 2016

  • Newly updated easy-to-read guide to help people better understand their retirement options
  • Covers key retirement planning issues and options under the pension freedom reforms
  • Written by Billy Burrows, an industry expert with over 20 years of experience

A newly revamped consumer guide to the pension freedom reforms, written by retirement expert, Billy Burrows, to help people better understand their retirement options has launched.

Nearly 18 months since the pension freedoms were introduced, the guide, "You and your pension pot when you retire - a guide to pension options for the over 55s", has been updated to reflect the experience of the reforms, as well as reflecting this year's changes to tax rules and allowances. Crucially, in the wake of the EU Referendum, it aims to help people reaffirm the retirement choices they have considered.

The guide is structured to provide answers to the key questions many people approaching retirement have including:

  •    Where can I go for advice?
  •    What type(s) of pension do I have?
  •    Should I take my pension as cash? And what are the risks?
  •    What alternatives to cash are available?
  •    Can I guarantee an income for life?
  •    What tax will I have to pay?
  •    What happens after my death?

To help bring these issues to life a case study, which runs throughout the guide, looks at these questions through the eyes of a fictitious couple, John and Mary, who are approaching retirement with 'everyday circumstances'.

Billy Burrows, author of the guide, said: "People reaching retirement with their hard-earned pension savings are now facing one of the biggest financial decisions of their lives. The options available are vast and are increasing all the time as the retirement market develops to meet the demand created by the pension freedom reforms.

"By writing this guide I wanted to help people, regardless of whether or not they choose to seek financial advice, by explaining the range of options now available to help them make more informed choices."

Vince Smith-Hughes, retirement expert at Prudential, said: "It’s now over a year since the pension freedoms were introduced and it’s clear that they are being embraced by many.

"Most recently it is interesting to see many retirees are taking a lower percentage income of their overall pension pot, presumably realising that the fund could need to last them for many years.

"With many more choices available to those retiring today, it’s vital that resources, such as this guide, are readily available to help people make sense of their options."

Following the introduction of pension freedoms, Prudential research1 found that  34 per cent of those retiring in 2016 feel more positive about their retirement, but with more options now available, nearly a third are now more likely to take professional finance advice.

The guide also comes as latest ABI data2 shows that, while the vast majority of savers are taking a sensible approach with their retirement savings (57% pots with 1% or less withdrawn during the most recent quarter), there are signs a minority may be withdrawing too much too soon, with 4% of pots having 10% or more withdrawn in the last quarter.

Notes to editors

1Research Plus conducted an independent online survey for Prudential between 25 November and 8 December 2015, among 9,318 non-retired UK adults aged 45+, including 1,000 planning to retire in 2016.

2ABI pension freedom statistics - one year on factsheet.

The information contained in Prudential UK's press releases is intended solely for journalists and should not be used by consumers to make financial decisions. Full consumer product information can be found at www.pru.co.uk

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