Pension fund withdrawals causing concern

CFM UK Ltd News Update: Figures from the City regulator show that 120,969 of those who cashed in a pension fund between July and September last year took the whole lot out, where in contrast, just 58,021 people used the money to buy themselves an income, said the Financial Conduct Authority (FCA). "Many aspects of the freedoms are working very well but there are aspects which give cause for concern," said Tom McPhail, retirement specialist at Hargreaves Lansdowne. "This is concerning as they would likely have been subject to a substantial tax hit on the withdrawal and there is the potential that they did not fully understand the tax implications of their decision," added Jon Greer, pensions technical expert at Old Mutual Wealth. The FCA data also suggests many are failing to take advantage of Guaranteed Annuity Rates, which typically promise an income of as much as 10% a year of the value of the pot.

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Posted on January 8th 2016

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