Drawdown retirees unaware of income flexibility
A YouGov survey commissioned by Zurich* has revealed that most retirees in drawdown are unaware they can vary their level of income. And, perhaps unsurprisingly, the research also found those not receiving financial advice were more likely to be in the dark.
Importance of advice
The study suggests over half of individuals who have unlocked their savings since the introduction of pension freedoms in 2015 were unaware they could scale back or stop withdrawals from their pension funds despite flexible income being a key feature of drawdown.
A stark difference was also revealed in the knowledge of those who had sought advice and those who hadn’t. Indeed, while only 35% of non-advised retirees knew they could reduce drawdown income, 77% of respondents receiving ongoing advice were aware of this fact.
There is a danger to this ignorance as it puts investors unwittingly at risk of draining their pension pots if stock markets fall. This is known as ‘pound-cost-ravaging’ (not to be confused with ‘pound cost averaging’) and is where people are forced to sell more investments to achieve unsustainable income levels. Engaging with your drawdown savings is vitally important; we’re here to help you
“…over half of individuals who have unlocked their savings since the introduction of pension freedoms in 2015 were unaware they could scale back or stop withdrawals from their pension funds…”
*Zurich, June 2019