Approximately 40% of savers who choose to cash in their pensions as part of the largest reforms in a century will be making an ‘irrational decision’, according to a financial watchdog.
Come April 6th, over-55’s will be given the opportunity to cash in as much of their pension as they please, rather than being forced to buy a guaranteed monthly income for life.
The Financial Conduct Authority has warned that up to 40% of savers who take up the option to cash in their pensions will be ‘irreversibly worse off’, and in some cases they say those who cash in will be left destitute as they enter old age.
The warnings take place following concerns that some savers are still unable to book an appointment with the Government’s pension guidance service – despite only one month to go before the reforms.
Experts have given their predictions, stating chaos will transpire once the changes come in, with the ‘Pension Wise’ service still without a telephone number or booking service. The new system is fraught with bad planning and widespread confusion meaning that thousands of people won’t get the pension advice they need to make the right decisions.