Savers 'failing to seek advice' when takinfg lump sums out of pensions
PUBLISHED: 09:29 05 October 2016 | UPDATED: 09:29 05 October 2016
Hundreds of thousands of pension savers have withdrawn cash lump sums under new freedoms without getting any financial advice, a new study reveals.
The TUC said 300,000 savers in defined contribution schemes were being left to “fend for themselves” when making important retirement decisions.
Thousands more bought annuities despite not consulting an expert following so-called pension freedom changes last year, it added.
People approaching retirement are having to make difficult decisions about their future plans, including choosing between complex, often expensive, pension products.
But the TUC warned that those on low incomes risked buying the wrong products or falling victim to scams.
It called for the government-backed National Employment Savings Trust (NEST) to be given the power to offer retirement income products.
The TUC wants savers to have access to robust, low-cost retirement income products. But commercial providers have been slow to offer these to customers.
General secretary Frances O’Grady said: “Pension freedom may sound great on paper, but it is not liberating to leave hundreds of thousands of people to fend for themselves in what is now a very complicated and expensive part of the pensions market.
“The inevitable result, if nothing changes, is a rise in scams and more older people suffering hardship.
“The new pensions minister must set NEST free to offer the sorts of retirement products that are so clearly needed by low- and middle-income savers.”