Only One in Twenty Pension Providers Will Allow Pension Freedom
Despite changes to the UK defined pension schemes and money purchase pensions, you may find that you will not be allowed to withdraw the money you want, or as freely as you would like.
According to an article in the Daily Telegraph, only one in twenty pension providers will allow you to access your money when you want to. The Telegraph describes this as a blow to the reforms which are due to come into effect in April.
The paper’s findings are based on research conducted by Xafinity, who claim to have conducted a major survey of eighty pension providers. They state that only 5% will allow retirees to take their whole pension pot as a lump sum, and only 2% will allow unplanned withdrawals, or to allow children and grandchildren to inherit the pot tax free.
Should your pension provider be one of the 98% which are not going to implement Pension Freedom into your scheme, you could be facing a dramatic reshaping of your future financial plans. This could cause considerable disruption to your retirement planning.
It is important to remember that Pension Freedom is not law, and your pension provider is not under obligation to give you the options it brings.
The Prognosis of Pension Reform
Several leading industry figures have warned that Pension Freedom may not be all that you hope. One figure, Tom McPhail of Hargreaves Lansdowne has warned that providers who were not ready today are unlikely to be come April; while the National Association of Pension Funds believe most providers will not be able to give access to pension funds freely until April 2016.
What do I do if my Pension Provider will not allow me to Access my Savings?
The only option in this scenario is to find another provider who will and transfer your pension fund to the new scheme. This can bring with it costs and charges, and obviously this will impact on your time.
The other danger to this is that you could opt for a pension scheme which simply fails to live up to your existing one in terms of return. The Financial Conduct Authority (FCA) is strongly concerned about this, and has rushed through measures to try and protect investors from this scenario, as well as better information on Pension Freedom and Tax.
Worried, Confused over Pension Freedom?
If you are worried and confused over Pension Freedom and whether you will be able to withdraw cash freely, contact your existing pension provider and ask them outright what the situation is. It is especially important to do this now, especially if your retirement plans are due to start in April this year or thereabouts.
Even if you receive a satisfactory answer get in touch. We can look at the market and see if we can find a better provider than your existing one. If one is available, you will have a better pension fund than what you have at the moment. To begin, click here and complete the form. We will schedule an appointment. Together, and we can better plan your retirement.