Pensioners use new rules to fund expensive purchases

Pension providers have recorded a surge in calls following the new access rules introduced that now allow pensioners to withdraw money.

Certain pension providers are reporting three times the normal volumes of calls, as pensioners enquire about the recent changes. Requests have included money for speedboats, cruises, holiday homes and children’s weddings, although it would seem that the majority are simply enquiring rather than wanting to go ahead and do so.

A number of people are also thought to have cashed in their pensions in order to pay off outstanding debt, invest in a property or make adaptations to their existing home, such as the installation of a stair lift. The new rules are providing older people with more flexibility, and are allowing for people to free up money to do things that they would otherwise be unable to afford to do.

Hundreds of thousands are enquiring about new pension rules

Pots of up to £50,000 can be cashed in online by pensioners, just by ticking a few boxes to confirm that the implications are understood, with thousands of people already having done so. However, it is thought that many pensioners are unaware of the tax implications, which in some cases has put off those initially wanting to make use of the new rules.

While it is thought that there is a general awareness of the introduction of drawdown, many people are not informed about all the ins and outs, with many only finding out information from friends. Therefore, on phoning the pension companies, many are waiting to speak to an advisor for advice, rather than continuing with withdrawing the money.

It has also been reported by the Guardian that many pension companies are experiencing such high volumes of calls that customers may be waiting up to two hours to speak to an advisor, despite a large number hiring more staff to cope with the demand.

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