More than £250m has been spent on holidays and cars by savers cashing in their pension pots since new rules were introduced two months ago. However more than 6 million pensions do not qualify for George Osborne’s pensions revolution including older savings plans which are not supposed to be cashed in before someone is 65, or those offering fixed-rate annuities.
George Osborne hailed the reforms yesterday, saying that 60,000 people had taken advantage of his pensions revolution since April. “More than £1 billion has been transferred out of people’s pension funds as a result,” he said. “It is a sign that this is a real success.” The rules allow anyone older than 55 to withdraw their entire pension pot in cash, subject to tax; convert it into an income for life, known as an annuity; or leave their funds invested but take cash out when they need it, known as income drawdown.