Public ‘unaware’ of pension reforms

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A couple on a yacht to illustrate pension reforms

Financial planning in association with Scottish Widows bannerNew survey reveals startling lack of familiarity with law changes which impact retirement planning

It was billed as the biggest and most exciting change to our pensions system for a century. In April this year, reforms came into place, announced by chancellor George Osborne in the previous budget, whereby people over the age of 55 could withdraw as much money as they choose to from their pension savings.

Now, though, a major new survey of 5,000 UK employees by global professional services company Towers Watson has revealed that most of those who stand to benefit from greater financial freedom in retirement as a result of the change are unaware the law change has even occurred.

According to the survey, nearly two thirds of British workers – 62 percent – are either unaware of the new pension laws or have very little understanding of how they are affected. The survey also suggested a lack of planning for old age amongst UK workers: Despite more than three quarters of people surveyed (77 per cent) acknowledging that retirement planning should be discussed more often, 56 per cent admitted that they rarely discuss it (only 38 per cent revealed having had a conversation with anyone about it in the last year).

“It’s not surprising that this lack of interest in discussing retirement planning has caused many to worry they haven’t saved enough for retirement,” she continued. “This is supported by the research which shows that employees are saving, on average, £1,640 less of their salary annually than they think they should.”

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