Couples look to use pension changes to leave inheritance

A quarter of couples plan to take advantage of pension freedoms to make sure they leave an inheritance to their families, according to new research. The findings from the Prudential annual study into financial attitudes and retirement planning among couples aged 40-plus are released as the pension freedom reforms turn six months old.People are looking to make use of the simplified rules regarding individuals passing on unused pension savings to a nominated beneficiary when they die, researchers said.However, many couples have decided that they want to pass on cash from their pension savings sooner so that their families don’t have to wait for an inheritance.One in six (16 per cent) couples plan to use the new rules to give money to their families to help them buy a new home, pay for education, or simply to fund a luxury they wouldn’t usually be able to afford.{desktop}{/desktop}{mobile}{/mobile}Vince Smith-Hughes, retirement income expert at Prudential, said: “It’s good to see that, six months in, the pension freedom reforms are encouraging couples to stop and think about their financial priorities in later life. These figures show that for many people there is balance to be struck between passing money onto their family and funding their own retirement.“For many couples we spoke to retirement is still a long way off – our previous research has shown a growing trend for people to work well beyond what have traditionally been seen as the standard retirement ages. With this in mind it’s never too late to start saving as much as possible to boost your pension pot to ensure that you and your family are as comfortable as possible in the years to come.”The advent of pension freedoms has also seen new concerns develop among those planning for their retirement. The research found that top of this list of concerns was a worry, among 33 per cent of couples, that they could run out of money in retirement. Other post pension freedoms concerns include making mistakes in retirement planning (15 per cent), making decisions that will lead to unnecessary tax bills (13 per cent), being faced with too many retirement income choices (nine per cent) and falling victim to fraudsters (seven per cent).Prudential also asked couples to list their priorities for any money they plan to take from their pot in the first year of retirement.The most popular response was taking a holiday (26 per cent), followed by paying off debts (25 per cent) and home improvements (17 per cent). One in six said that their priority was to seek financial advice before making any decisions.

Couples look to use pension changes to leave inheritance

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