02 Aug 2019

Majority of Pension Drawdown Investors are unadvised and unaware

Research by Zurich has found some shocking statistics. In a survey of 2,028 over 55 year olds in flexible drawdown who have not used the services of a financial adviser, 52% do not know they can reduce withdrawals from their pension and 56% do not know they can stop taking any withdrawals at all.

A pension in flexible drawdown is a way of accessing the capital within your pension whilst it remains invested and you have the freedom to take an income or capital withdrawals at any value or frequency.

The effect of this lack of understanding how their flexible drawdown works, is people run the risk of eroding the value of their fund, potentially before they can afford for this to happen, as they are not adapting withdrawals to either lifestyle needs, taxation reasons or market performance.

When pension flexibility was announced in 2015, the fear of the ‘Lamborghini’ generation was rife, with speculation that people would sell up their pension pots and buy non-essential luxuries. The reality is very different - people (with a few exceptions of course) value their pensions, they have spent years saving and now they need that money to support them for the rest of their lives. Research such as that by Zurich, causes the worry that this may not be the outcome for many.