Key comments on the first twelve months of pension freedoms
06 April 2016
Comment from Dean Mirfin, technical director at Key Retirement, on the anniversary of pension freedoms:
“One year on from pension freedoms and the outcomes in many respects are showing that for many common sense is definitely prevailing. Cash withdrawal averages are low and striking when compared to the average annuity purchase price of £53,000. As the latest ABI figures show cash withdrawal numbers have fallen considerably as have the volumes and amounts via income drawdown.
“There is still a number of cautionary notes, the first regarding the core cash withdrawals and the cluster of these being taken out by those under age 60. We do not yet fully understand the impact later, if any, of this behaviour. Secondly we are yet to see the impact for those invested in income drawdown products, both in terms of income withdrawal levels and also the impact of the turbulence in the markets during 2015. Time will ultimately tell but the signs are clear that the annuity still has a very real part to play in providing secure guaranteed lifetime income, with greater product flexibility and extended guarantees, many are content to exchange the temptation of greater access for the security of a guaranteed income.”