East Londonderry is in the top five constituencies in Northern Ireland with the most residents set to gain access to their pension pot, according to a financial services company.
A total of 12,069 of those in the constituency’s 55-64-year-old age bracket- nearly 12% of the population- could benefit from a government Bill to be heard in the House of Commons next week. It aims to make free and impartial pensions guidance a ‘social norm’ for savers accessing their pension pots.
FCA analysis shows that 1 in 5 (18%) of people who have decided to make use of their defined contribution (DC) pension pot are confused about what they have actually done. For example, they are unsure whether they have moved their pension savings from a pension into a drawdown product, bought an annuity, or only withdrawn some of their money and left the rest in their pension.
Research conducted by Just Group reveals that 37% of 55-64 year olds find pensions difficult to understand - that’s 4,500 in East Londonderry - and 25% do not feel confident to make the right decisions about pensions - 3,000 in the constituency.
Stephen Lowe, group communications director at Just Group, said: “The Financial Guidance Bill going through Parliament could help resolve a glaring omission from the Pension Freedoms policy – ‘what to do about those not getting advice or help?’.
“The Bill’s proposal to automatically enrol everyone into free impartial guidance will equip people to make better informed decisions and help to prevent people from being scammed, paralysed by choice or simply following the path of least resistance into uncompetitive and perhaps ill-suited products.
“People naturally disposed to taking professional advice may choose to opt out of free guidance but for the many thousands of people in East Londonderry who are likely to make decisions in the near future about what to do with their pension savings, automatic enrolment into pension guidance could be a game changer.”
The proposals in the government Bill to automatically enrol people into free and impartial pension guidance have the support of a range of consumer groups including Which?, Age UK and the Financial Services Consumer Panel.
The Bill is due to be debated in Parliament on Monday.