With life moving fast, demands on our time and finances never-ending, it’s easy Then there’s the ‘noise’ created by global geopolitics, economic challenges and their impact on markets and in turn your finances. Sometimes burying your head in the sand (preferably on a summer holiday) may seem like the most favourable option!
When it comes to your finances, neither inertia nor acting in haste is recommended. In fact, making informed, strategic, confident decisions about your wealth has arguably never been more important.
A decade on from pension freedoms: are savers making informed choices? Since pension freedoms were introduced in 2015, many over-55s have been accessing their pensions without understanding the tax implications or seeking advice. Research1 among over-50s has found that only four in ten had considered the tax implications of withdrawing taxable lump sums, and
just 39% had taken financial advice. Also, while over half took the full 25% tax-free lump sum, many paid off debts or made the peculiar decision to move it into savings. Nearly one in five didn’t seek any guidance at all. With life expectancy on the rise, almost half of over-50s are worried about running out of money in retirement.
‘Lottery effect’ puts pension pots at risk Many retirees risk running out of pension savings by their late 70s as a result of the so-called ‘lottery effect’ (where access to large sums prompts impulsive spending) likely to blame, according to a new study2. One in seven see their pension lump sum as a bonus and nearly half access it simply because they can. With the average life expectancy of a current 60-year-old in the UK sitting at 86, some retirees could be left with a shortfall between their retirement funds running out and the end of their life.
With new rules likely to be introduced from 2027 regarding unused pensions becoming subject to Inheritance Tax (IHT), careful planning remains key to long-term retirement security.
How career paths define your pension pot Research3 shows career progression significantly affects pension outcomes. Someone earning £25,000 at 22, with steady 3.5% annual pay rises, could retire at 68 with a £210,000 pension pot, while salary growth of 5% could boost this to £290,000. However, retiring as early as 58, for example, could reduce that pot to £176,000. While rapid career growth helps, burnout or early retirement can limit gains. Therefore, balancing ambitious career choices with wellbeing is critical.
Time to focus on your pension? Whatever life stage you’re at, we’re here to help you make confident, informed decisions. Your pension deserves some airtime.
1 Royal London, 2025, 2 L&G, 2025, 3 Standard Life, 2025
