UK. Rush to cash-in small pensions will leave thousands below ‘acceptable’ retirement income, warns Just Group
Cashing in small pension pots early to rely on State benefits in retirement could leave many thousands of people struggling to achieve an acceptable income in later life, suggests new analysis by Just Group.
The warning comes following the publication of Minimum Income Standards (MIS) by the Joseph Rowntree Foundation (JRF) reflecting the public’s views on how much weekly income is needed to achieve a minimum acceptable standard of living in the UK today.
The JRF’s 2018 report suggest the MIS for single pensioners is £195.90 a week with benefits such as State Pension and winter fuel allowance providing 93% or about £13.71 less than the minimum required. For pensioner couples the MIS is £301.92 a week, with benefits providing 90.3% or about £29.29 less than required.
Stephen Lowe, group communications director at Just Group, said:
“State Pension and other benefits don’t quite provide enough income for pensioners to achieve these minimum income levels so retirees will need to top-up using their own savings or pensions.
“The good news is that the sums needed are relatively modest, the bad news is that the financial regulator has described cashing in funds early ‘the new norm’ with tens of thousands taking small funds up front each month.”
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