No evidence of Lamborghini effect
Retirees showing caution over access to pensions
A study by pensions and investments company Zurich reveals that most over-55s either prefer to leave their money invested, or lack the knowledge or inclination to withdraw any of the capital.
Since April retirees have been given access to their pension pots rather than buy an annuity. There were claims that this would lead to a spending spree with pensioners rushing out to buy fast cars and other luxury items.
The pensions minister at the time, Steve Webb, added to fears that pensioners would blow their savings by splashing out on a Lamborghini (above), adding: “and that is their choice.”
Critics warned that pensioners would make bad choices, and there has been some evidence of unscrupulous advisers taking advantage of retirees’ lack of understanding of the rules. There have been calls for better advice to be offered by the government.
Even so, it seems the public has been far more restrained than some feared. Zurich’s survey reveals that most of those positioned to benefit have been more cautious.
Of the 91% who have not accessed their pension pots, just under one-third have looked at their options. Of those, 54% said they are not ready to make a decision, while 34% prefer to keep their pensions invested and will use other assets before accessing pension pots.
A further 18% are worried that if they do draw funds down from the pension pot they will not be left with money to live on in retirement.