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27 Sep 2017

More people seeking advice over pension transfer options

Savers are increasingly looking for financial advice about pension transfers, following the introduction of pension freedoms in 2015.

According to new research from Aegon, three quarters (76%) of financial advisers expect an increase in clients in the coming year, and more than half of advisers (53%) say that the greatest demand for advice is from people with a ‘final salary´ pension.

The pension freedoms gave people much more control over their pension savings, allowing anyone aged 55 and over to take the whole amount as a lump sum if they wish — paying no tax on the first 25%, with the rest taxed at their income tax rate.

The changes undoubtedly give savers more choice, but they also make the retirement planning process more complicated. As such, these individuals are seeking professional advice to help weigh up all the options.

Later life care is another significant motivator for people to seek advice, with the number of older people in care predicted to double by 2035.

Steven Cameron, pensions director at Aegon UK, commented: “People face more and more choices over their long and short-term savings options, and initiatives like pension freedoms have had a positive effect on how engaged people are with retirement planning.

“But with choice comes complexity and people want to be sure they are doing what´s best for their financial futures, while trying to avoid the confusion that comes with frequent changes to pension rules.

“Bearing that in mind, it´s hugely encouraging to see that consumers recognise the big decisions they make now affect their finances in later years and are increasingly turning to financial advisers for their expertise and advice. The benefit of financial advice can´t be underestimated.”

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