Three years on from the pension reforms, figures released from HMRC have revealed that £17.5bn has been withdrawn. But how are people spending their pension savings?
Research by AJ Bell has recently revealed the following:
• £2.3bn has been spent on luxury items such as holidays, cars and home improvements
• £1.6bn has been withdrawn from pensions to invest in other products such as ISAs
• £3bn has been used to pay off debt and reduce interest payments
• £245m of withdrawals have been spent on entertainment such as eating out, season tickets or gambling
• £60m has been used to pay for care
The data also found that parents or grandparents have spent £1.2bn to help children, while the buy-to-let market has had a £1bn injection over the past three years, with many people using pension withdrawals to invest in property.
While the pension freedoms present a range of opportunities to those in or approaching retirement, it is also important to remember that your hard-earned pension savings will need to support you for years to come. To make the most of your pension, it is vital to seek financial advice. To arrange a free no-obligation Pension Review to discuss your plans, call us on 01794 525500 or email email@example.com