Failing to make use of other savings first, taking more than is needed and poor timing are three of the most common mistakes made by people when accessing tax-free cash from their pension, says Fidelity International head of pensions policy, Richard Parkin.
Under the new pension freedoms, taking tax-free cash before full retirement is proving very popular - so much so in fact that data from Fidelity shows as many as three-quarters of those going into drawdown are simply taking their tax-free cash and leaving the rest of their pension pot invested. "Pension freedom is all about giving people control of their pension savings," says Parkin. "We have seen customers using tax-free cash in a wide range of ways - from supporting children in getting onto the property ladder to paying for that dream holiday." He adds, however: "While pension freed...
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