So How Are Those 'Pension Freedoms' Working Out?

In April 2015 the UK woke up to a world of freedom. Pension freedom. From that date if you had a defined contribution pension pot and were 55 or over, it was up to you what you did with the money. You could buy an annuity, you could drawdown your cash and leave some invested, you could buy a Ferrari (or a Lamborghini) if you had been particularly thrifty.

Of course sports car purchases would be limited to those who had been extremely thrifty and had some pension pot to spare. Actuarially most people who retire today will live a reasonably long time and need finances to support themselves. The state pension, whether the old one or the single tier system coming into force in 2016, is not particularly generous and although you may have enough money to buy a sports car now there may be better things to put your money into if you want to have a comfortable retirement.

Also the amount of money contained in pension pots (even the small ones) tends to attract pension scammers. They often have some very clever ideas of how you can use most of your pension savings for things you want to do, and somehow get it all back through guaranteed return investments in slightly bespoke assets in unregulated markets. These rarely turn out well for anyone bar the scammer and the tax authorities.

The Government was...