Member Article

Pension freedom - LEBC comments on early client experiences

Nick Flynn, Divisional Director at LEBC, The Retirement Adviser says, “More people are accessing their pensions, in particular using the tax-free cash option and then taking the balance out over future years.

“We have seen individuals taking tax-free cash to pay off debts, help fund children’s property/education, purchase their council house, and for buy to let investments. The balance is then used to provide annual income to keep within the relevant tax bands or as chunks of cash, before other pensions kick in. Or many simply take a stream of income with the flexibility to change this as and when required.

“So are people being foolish and careless with their pension funds and buying luxury items they cannot afford? In our experience - no. None of the very many individuals we have advised in the last few months have done so. They have all understood the taxation and life expectancy issues after going through the advice process.

“We still have plenty of people purchasing annuities and these tend to be those with relatively minor health issues, who qualify for enhanced annuity rates. However, the single most common desire is to access some or all of the cash and invest the balance for the future.”

This was posted in Bdaily's Members' News section by LEBC Group Ltd .