People taking advantage of the pension freedoms and dipping into savings pots aren’t blowing the cash on fast cars as was feared.
But many are getting caught out by not fully understanding the options available and how they will affect their finances for the rest of their lives, according to research by national charity Citizens Advice.
Almost one in 10 got hit with paying more tax than they expected, rising to one in three among people who took their whole pot in one go.
One in 20 ended up losing money as they didn’t realise all means-tested benefits can be affected by having a lump sum, including Housing Benefit and Pension Credit.
Meanwhile, three in 10 simply put cash into a bank account which, in the current low interest rates climate, could mean it’s languishing and declining in real value due to inflation.
If you’re considering accessing pension savings, use your free Pension Wise session to help you get to grips with your options.
Call 0800 138 8292 or visit your local Citizens Advice to book a session.