Hoarding cash and benefits hit: – The realities of pension freedoms

A worrying number of consumers are using pension freedoms to transfer their pension pot into their bank account, research suggests.

Over one in five plan to spend their pension on luxury goods, while 16 per cent plan to use their pension to pay off debt. Some 18 per cent of respondents said they were accessing their pension to invest the money elsewhere.

The research also found that while most consumers understood the implications understood how their money would be taxed, there were some savers who were caught off guard.

A further 6 per cent said they had unexpected problems related to benefits, such as a reduction in benefits or losing eligibility for welfare payments entirely.