Over a quarter of a million pension savers are being left to ‘fend for themselves’ when making important decisions about their retirement, the Trades Union Congress (TUC) has warned.
Basing its findings on data from the Association of British Insurers (ABI) and the Pensions Policy Institute (PPI), the TUC revealed that, in the first year of new pension freedoms being made available, 300,000 savers with defined contribution schemes withdrew cash lump sums without consulting an expert.
A further 60,290 individuals purchased annuities without seeking financial advice, whilst an additional 11,265 bought ‘drawdown’ contracts – permitting them to take money from their pension pot – without obtaining professional advice.
The TUC has stated that financial advice is ‘expensive and hard to come by’, and warned that low and middle-income savers are at risk of ‘running into hardship’, purchasing the wrong retirement products or falling victim to scams.
Frances O’Grady, General Secretary of the TUC, commented: ‘It is not liberating to leave hundreds of thousands of people to fend for themselves in what is now a very complicated and expensive part of the pensions market.
‘The inevitable result, if nothing changes, is a rise in scams and more older people suffering hardship.’