1 in 3 unaware of budget changes despite approaching retirement

More than one in three people approaching retirement are unaware of the pensions reforms announced in the March Budget, according to new research from MetLife.

Its study among people aged 55+ with pension savings shows 35% are either unaware or unsure about the overhaul due in April 2015 which will enable retirement savers with defined contribution schemes to access their money however and whenever they like from the age of 55.

The research found 27% admitted to having not heard or read about the pension changes while 8% did not know whether they had heard or read about the changes.

However the study – conducted after the Budget – showed a switch away from annuities with 27% of savers definitely ruling out buying one before legislation is agreed while another 22% were unsure of retirement income plans.

MetLife believes the lack of awareness underlines the need for increased consumer education on retirement income options in the run-up to new legislation and after. It is working with renowned pensions expert and consumer champion Dr Ros Altmann to highlight the changes and explore retirement income options.

Dominic Grinstead, Managing Director, MetLife UK, said:

“It is easy for the pensions industry to assume that everyone is focused on the Budget reforms and thinking about what they need to do.

“In reality substantial numbers of people who need help and advice to navigate the new pensions flexibility are unaware that the industry has changed completely and they will now have the freedom to control their retirement funds.

“The Budget changes will benefit everyone saving for their retirement but for that to be achieved there is a real need for consumer education on retirement income solutions now and in the run-up to April 2015 with a major role for financial advisers to help deliver.”