Couples use pension freedoms 'to give financial gifts'
One in six couples plan to use their new pension freedoms to give financial gifts to their family, research has found.
Some 16% of couples plan to use the rules introduced in April to give money to family members to help them buy a new home, pay for education or help them to splash out on a luxury, according to a survey among couples aged 40-plus for Prudential.
Taking a holiday, paying off debts and home improvements also topped the list of couples' priorities during their first year of retirement, among those planning to take some cash out of their pot.
The reforms, which were introduced on April 6, mean that instead of being required to buy a retirement income called an annuity with their pension savings, people aged 55 and over have more flexibility over how they use their money.
The changes apply to people with a defined contribution (DC) pension. In general, people can now withdraw all their pot, or take it in chunks, or leave it invested, although some firms are offering more flexibility than others. The first 25% of the pot is generally tax-free, with the remainder subject to tax.
The free, Government-backed Pension Wise service offers guidance for people deciding what to do with their money.
Vince Smith-Hughes, a retirement income expert at Prudential, said: "These figures show that for many people there is balance to be struck between passing money on to their family and funding their own retirement."
More than 1,000 people from across the UK who live with a spouse or partner were surveyed for the research.
