Today’s official figures1 report that £32.97 billion of taxable payments have been taken from pensions since freedom and choice was introduced. This equates to an average of £18.75 million being flexibly withdrawn every day over the past 1,760 days since pension freedoms were introduced.
Alistair McQueen, Head of Savings and Retirement at Aviva comments:
“The pension freedoms continue to break records, exceeding expectations, as 1.34 million individuals have so far decided to take advantage of their greater flexibilities.
“However, the peak for pension freedoms are yet to come. In the coming decade a record nine million people are set to enter the arena of the pension freedoms at age 55.2 This is more than we can expect to see in any decade that follows. The 2020s are likely to see “peak pension freedoms”.
The pension freedoms continue to break records, exceeding expectations.
“With pension freedoms’ popularity continuing to grow and savers being entrusted with increased individual responsibility, it is worrying that 94% of adults are flying solo, not seeking any financial advice each year.3
“Last week, the Money and Pensions Service (MAPS) launched its strategy with a vision of “everyone making the most of their money and pensions”.4 This is the right vision, but MAPS needs the support of the industry, regulator and government if we’re to close the advice gap.”
Aviva’s five top tips for those considering their pension freedoms are:
- Take your time: the pension freedoms are available from age 55, but there is no need to act at age 55. And your time in retirement may be longer than ever before. Act in haste and you may repent at leisure.
- Avoid the scammers: pensions represent the biggest single source of private wealth in the UK, so the attraction for scammers is obvious. If you receive a cold-call to discuss your pension freedoms, just hang up. Since January 2019 it has been illegal to make these cold calls. See the FCA’s ScamSmart website for more advice.
- Use PensionWise: the government’s free PensionWise service provides free guidance on the pension freedoms. Take advantage. It has a high 97.9% customer satisfaction.
- Shop around: you may have been saving for 30 years, so take more than 30 minutes when considering your options. Shop around for your best deal.
- Think about tax: nothing is certain, but death and taxes. Income tax follows us through our working life and into retirement. The way in which we access our pension savings can have significant implications for our tax bills, and income in retirement. With consideration, tax can be less taxing.
Contains public sector information licensed under the Open Government Licence v3.0.
Notes to editors:
- For information on how Aviva is helping our people, customers and communities impacted by COVID-19 visit: www.aviva.com/covid-19-our-response/
- We exist to be with people when it really matters, throughout their lives – to help them make the most of life. We have been taking care of people for more than 320 years, in line with our purpose of being ‘with you today, for a better tomorrow’.
- In 2020, we paid £30.6 billion in claims and benefits to our customers.
- Aviva is invested in our people, our customers, our communities and our planet. In 2021, we announced our plan to become a Net Zero carbon emissions company by 2040, the most demanding target of any major insurance company in the world. This plan means Net Zero carbon emissions from our investments by 2040; setting out a clear pathway to get there with a cut of 25% in the carbon intensity of our investments by 2025 and of 60% by 2030; and Net Zero carbon emissions from our own operations and supply chain by 2030. Aviva has been leading this agenda for decades: Aviva was the first international insurer to go operationally carbon neutral in 2006 and we are champions of renewable energy and energy storage at our offices, allowing us to achieve our 2030 carbon reduction target (70% reduction on 2010 levels) 10 years early. Find out more about our climate goals at www.aviva.com/climate-goals and our sustainability ambition at www.aviva.com/sustainability.
- Aviva is a Living Wage and Living Hours employer and provides market-leading benefits for our people, including flexible working, paid carers leave and equal parental leave. Find out more at www.aviva.com/social-purpose
- We are focused on the UK, Ireland and Canada where we have leading market positions and significant potential. We will invest for growth in these markets. Our international businesses in Europe and Asia will be managed for long-term shareholder value. We will also transform our performance and improve our efficiency. Our transformation will be underpinned by managing our balance sheet prudently, reducing debt and increasing our financial resilience.
- Total group assets under management at Aviva group are £535 billion and our Solvency II capital surplus is £13.0 billion (FY20). Our shares are listed on the London Stock Exchange and we are a member of the FTSE 100 index.
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