Just because everyone can now access drawdown it doesn’t mean that everyone can actually afford to do it. Many independent financial advisors have real concerns that individuals don’t understand how long their retirements could be being a bit rash in accessing cash in the early years, leaving them with a meagre income in later years.
Simon Massey, wealth management director of MetLife, a pension provider, says ‘There is a key question about…how long your money will last,’ he said, ‘ a man aged 65 has a one-in-four chance of living to 90 and a one-in-10 chance of living to 100.’ Massey believes that in order to be able to benefit from drawdown, someone needed savings of ‘between £100,000 and £150,000’ as a minimum. ‘Unfettered drawdown is right for some clients if they have the capacity for loss and they can take a long-run view but not a lot of customers are in that position,’ he said. In short, many people have not saved enough to be able to raid their pension for lump sums and also expect it to provide an income.
Massey said recent stock market turbulence had added to the problems of drawdown cash running out as some people who had their money invested through a drawdown plan ‘will be feeling the effects of the downturn right now’. If you need help looking at your drawdown options Enable’s IFA’s in Bishop’s Stortford are happy to look at the options with you.
Issued by: Enable Independent Financial Life Planners 25c North Street, Bishops Stortford, Herts CM23 2LD Telephone: 01279 755950 - Fax: 01279 657339 Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority. It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us. NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE
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