Members of the UK200Group of independent chartered accountancy and lawyer firms have responded to Chancellor George Osborne’s comments on the take-up of new pension freedoms. Mr Osborne hailed the greater flexibility introduced in April as a success, saying it had allowed 60,000 people to access £1 billion in funds. Commentators say the figures suggest that retirees may be cashing in small pension pots, with the average worth around £16,600.

There has been criticism that some pension providers are refusing access to pension pots and Mr Osborne warned: “We will be watching these things very carefully."

 

Jonathan Russell, partner, UK200Group member ReesRussell

 “The so-called ‘success’ of the new pension rules, which has meant that a) many people with smaller pension pots are cashing them in and – surprise, surprise – spending some of the money and b) that some in the insurance industry are making it either difficult or seeing it as an opportunity to make money for themselves, is in part down to the huge distrust in the pension and financial industry. “Many simply do not trust the industry to look after their money nor give them an adequate return but instead feel they can put that money to better use and in some cases that means spending it. “OK, this means that some will now not have a private pension left but in the main these are the people who had small pension pots anyway, which would probably have given an insignificant annual pension.”

 

David Whiscombe, director of tax at UK200Group member firm BKL

 “Today’s press reports suggest that a significant number of people seem to regard the opportunity to draw funds from their pension pots as more akin to a lottery win than to responsible financial planning, with much of the money drawn being ‘invested’ in cars and holidays.  “So perhaps those pension funds that are alleged to be dragging their heels in facilitating withdrawals will actually be seen to be doing their investors a favour.”

 

David Ingall, past president of the UK200Group

“The numbers who have accessed their pension pots, for whatever reason, are relatively small and they have only averaged around £16,000 withdrawal each. “Yes, the pension industry is over-cautious, it can see another round of scandals a few years hence if it doesn’t keep the brakes on.”

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Established in 1986, UK200Group is the leading mutual professional association in the UK with some 150 offices of quality-assured member accountancy and lawyer firms throughout the UK totalling over 550 partners, 150,000 business clients and global links in over 50 countries. UK200Group provide services and products that are designed to enhance the business performance of its members.  Telephone 01252 401050, email admin@uk200group.co.uk or visit www.uk200group.co.uk  

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