Pension scheme members who use Pension Wise have a “greater understanding of the facts” regarding what they can do with their pension savings than non-users, analysis from the Department for Work and Pensions (DWP) has revealed.
DWP’s survey found that each of its eight questions were answered correctly by over 60 per cent of Pension Wise users, while each question was only answered correctly by 50 per cent or fewer of non-users.
Nearly three quarters (74 per cent) of Pension Wise users knew that you can take cash in “chunks” from their pension pot, compared to 37 per cent of non-users.
Furthermore, 70 per cent of users knew that they could move their pension pot from one provider to another, while only 45 per cent of non-users knew this.
Sixty-one per cent of Pension Wise customers knew that they could take out there entire pension savings in one go, compared to 25 per cent of non-customers, while 68 per cent of users knew that you do not have to buy an annuity, compared to 44 per cent of non-users.
Only 37 per cent of those not using Pension Wise understood that they could choose more than one option for the same pot, while this figure was 70 per cent for the service’s customers.
Half of non-users believed that you must start taking money from their pension as soon as they retire, compared to 76 per cent of users.
In its report, the DWP stated: “There are two statements where customers’ knowledge has improved since 2016/17, with a larger proportion now answering correctly: not being forced to withdraw money as soon as you retire (up from 70 per cent to 76 per cent); and being able to mix your withdrawal options (up from 65 per cent to 70 per cent).
“There are also two statements where both customers’ and non-users’ knowledge has declined since 2016/17: being able to start taking money at age 55 (down from 73 per cent to 68 per cent for customers); and taking all the money from your pension in one go (down from 67 per cent to 61 per cent for customers).
“The gap between customers and non-users is, however, consistent across both years.”
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