Advice needed to enjoy new pension freedom

Kieron Bassett.
Kieron Bassett.
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From April 6 people aged over 55 will be able to access all their pension funds and this day will be known as Pension Freedom Day.

It has been predicted that on this day a feel good factor will be felt throughout the UK which is very handy for the Government attempting to be re-elected the following month.

It is likely that in April not only will the over 55s have a spring in their step but also car manufacturers, buy-to-let estate agents and travel agents, who stand to benefit significantly from the cash withdrawals from pensions.

Worryingly there are alarm bells already ringing regarding unregulated companies contacting savers encouraging them to release their cash.

These people are offering investment opportunities that are on the face of it significantly better than anything else on the market.

The sales pitch they use stays within the law as they are not offering advice, but a no obligation pension review with no upfront fees or hidden charges.

These firms are invariably shady operators who are peddling illegal expensive or at best highly speculative propositions. In the worst case scenario victims of scams could lose their retirement savings leaving them having to live off the state pension and benefits into retirement.

Personally I think that despite the pitfalls mentioned above, the new freedoms are to be welcomed.

They have allowed people to take control of their pension savings, rather than as in the recent past it could be argued that the pension took control of them as people were funnelled down the annuity route.

This often meant that they had to exchange a lump sum for life in return for an annual income that struggled to beat deposit rates on the high street.

However, I believe that people should appreciate the responsibility pension freedom brings and think deeply about the future.

I believe that people should enjoy their hard earned pension income, but I think that advice is needed to make the most of the new found freedom.