Pension system overhaul pushes over 50s to switch retirement plans

The overhaul of the pension system announced in the Budget has seen a large number of 50-somethings switch their retirement savings into a self-invested personal pension, according to figures from the pension provider, Liberty SIPP.
 
In the three months since the Budget, the average age of people opening a pension with Liberty SIPP has risen to 52 – four years older than the average age of applicants during the same period in both 2013 and 2012.
 
The figures reveal that from April to June 2014, the average age of new Liberty SIPP customers was 52.4, compared to 48.5 in the second quarter of 2013 and 48.4 in Q2 2012.
 
The overall figures show a marked spike in applications from those in their 50s, with this age bracket alone now accounting for a third (33.7%) of all the firm’s new clients (with those aged 55 alone making up 5% of the total).
 
In previous years demand was spread more evenly across all age groups, with 40-somethings making up the largest group of applicants.

John Fox, Managing Director, Liberty SIPP, commented:
 
“In the seven years between the launch of Liberty SIPP and this spring, the age profile of our customers barely changed. So for it to have shifted so dramatically in the immediate aftermath of the Budget can be no coincidence.
 
The radical changes announced by the Chancellor have rightly been described as a pensions “revolution” and it appears that Britain’s 50-somethings are making the most of the reforms.
 
They have most to gain from the new rules on pensions, which, from next April, will allow anyone over 55 to spend their pension how they want.
 
While some people will treat themselves under the new regime, a poll we conducted recently found that a clear majority of Britons will take a flexible approach to funding their retirement – leaving some of the money invested and experimenting with drawdown.
 
SIPPs are the most flexible form of pension, and the surge in demand from those approaching, or at, the 55 mark shows that many people plan to make full use of their newfound freedoms.”