The high level of withdrawals highlights just how bold and innovative savers can be once they are granted the freedom and flexibility to do as they wish with their pensions rather than being saddled with the passive and sometimes disempowering pension rules of a few years ago.
Many are not simply withdrawing their money and spending it or indeed investing it in the stock market. Instead, they are choosing other methods of taking their pension, including expat pension transfers such as QROPS and SIPPs.
The figures are also further proof of the moribund state of final salary schemes; many savers are taking the option of receiving a lump sum payment in exchange for the cancellation of their final salary scheme. This is an arrangement that seems to be suiting both savers and the administrators of final salary schemes.
However, there are some concerns that the level of pension withdrawals could be a sign that some savers are making irresponsible or ill-informed decisions that could place their future financial security in jeopardy. As such, every saver should consider that the freedoms afforded by the pension reforms place an additional emphasis on the need for trusted professional advice when making decisions about how to transfer or invest pensions. Any desire to scrimp in this regard is likely to prove a false economy.
Good advice can help savers make solid plans and contingencies that align with their strategies, goals and projected timescales. This is hard enough for most investment professionals to achieve, let alone the lay investor.
Interestingly, the FCA figures reveal that close to 40% of the withdrawals were made by savers between the ages of 55 and 65, with the majority taken as a lump sum; it is clear that today’s savers are seeking to do things are on their own terms, but do so successfully good advice is critical.
Speak to Blacktower today for expat pension planning advice and information on the full gamut of wealth management and investing opportunities available to you as an expat.
This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
There is so much to recommend around retiring to Spain. However, the many opportunities inherent in a move to the country also bring a great many challenges. As such, if you want to join the approximately 250,000 British expats who currently live there, you will need to consider a number of important questions, not least the cost of retiring in Spain.
I recently attended the British Embassy Outreach Meeting in Perigueux and as you can imagine there were a lot of disgruntled expats wanting answers that, frankly, aren’t really available right now. Understandably, for many living through the turmoil and uncertainty of Brexit, there is a lot to take into consideration and some may even be contemplating moving back to the UK.