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Exercising Pension Freedoms

When the Government introduced a more flexible withdrawal
system for pensions the reaction was mixed, with some hailing the move as groundbreaking
whilst others warning about the dangers of people using their pensions to pay
for luxuries, thereby leaving themselves short of capital in subsequent years. However the idea of pension freedom resonated
with the public and in the first quarter of the scheme’s existence, 84,000
individuals drew down £1.56 billion.



Although the sums drawn down reduced somewhat in subsequent
quarters, it seems as though the popularity of the scheme is undiminished. So much so that Q2 this year has set new
records with 159,000 individuals withdrawing a total of £1.77 billion from
their pension pots. What the statistics
do not show is the extent to which the monies withdrawn are then reinvested in
annuities, ISAs or other forms of saving.



With compulsory reporting only coming into effect in the
latest quarter it has to be said that the amounts withdrawn in the first four
quarters may have been underestimated. Commenting on the statistics Simon Kirby, the
Economic Secretary to the Treasury, said “It’s only right that people should
have a choice over what they do with their money and today’s figures show that
pension freedoms continue to be a popular choice.”



If you’re looking for advice on pension investments, or if
your situation has changed and you may therefore need to review your existing
investment portfolio, contact Beckworth by using one of the links on our
website.