Yougov has just completed a survey ahead of “Pensions Freedom”, showing what the great British public intend to do after April with their pension pots, don’t worry if you don’t understand it!
Just over one-in-ten people with a defined contribution private or company pension are planning to buy an annuity, according to figures from Yougov.
In a survey of 1,959 British adults for the Sunday Times, Yougov found that 33 per cent were contributing to a defined contribution (DC), while just 5 per cent were members of defined benefit (final salary) schemes.
Of the DC pension-holders, some 54 per cent said they didn’t know what they would do with their pension fund on retirement.
However, only 11 per cent said they would buy an annuity, while 16 per cent responded that they planned to spend their fund.
Some 10 per cent said they would invest in buy-to-let property, while 8 per cent preferred stocks and shares and 6 per cent specified bonds.
A further 13 per cent said they would pursue other investment options.
Annuities were most popular among those aged 60+, with almost a quarter saying they planned to buy one.
Annuities were most popular among those planning to vote for the Liberal Democrats at the upcoming election. Some 18 per cent of Nick Clegg’s backers said they would opt for the product at retirement, compared with just 8 per cent of Labour’s supporters.
The figures come just over a month ahead of the implementation of new pension freedoms, which will allow savers to withdraw from their pots from age 55.
So what now? Do you buy an annuity, a house to let out, some shares or other investments to produce and income, or do you just simply spend it?
The answer lies in the questions, what do you want or need from your pension pot?