UK pensions puzzle: Pension freedoms spark both young and old to ask more questions

Hayley Kirton
Follow Hayley
Parents Call For Childcare Subsidies
The questions about pensions just keep coming (Source: Getty)

Annuity providers may have been worried their work would drop off once the pension freedoms were introduced, but there's one organisation in the pensions sector that has seen work flood in.

The Pensions Advisory Service has received a 71 per cent increase in people seeking guidance on their pensions since the pensions freedoms rules came in last year, research released today has found.

The biggest trigger for people to pick up the phone was reaching retirement age and the average age of those approaching the service was 59.

However, almost one in five (17 per cent) enquiries were from people who were just starting to contribute to a pension pot.

Read more: Yet another way low interest has sent us back to the drawing board

"The introduction of pension freedoms has triggered a step change in awareness and engagement but there is still a way to go before people are confident on what is needed to secure their retirement," said Michelle Cracknell, chief executive of The Pensions Advisory Service.

Baroness Ros Altmann, pensions minister, added: "The pensions landscape has changed rapidly over the last year and it is important that people understand what the changes mean for them. It is important that people of all ages start planning for the future – not just those nearing retirement. They often need help in understanding how pensions work and The Pensions Advisory Service can provide valuable help."

Read more: Over 55s split on pension freedoms opinion

A recent survey by The Pensions Advisory Service also showed a worrying lack of understanding over how the pension system worked. While nearly three-quarters (73 per cent) of those questioned said they thought they would be able to live off of their state pension comfortably during their golden years, around a third (30 per cent) admitted they didn't know how much they would receive.

Meanwhile, 71 per cent confessed that they thought pensions were complicated.

Under the pension freedom rules, which came into force last April, those aged over 55 can now access their pension savings without first purchasing an annuity.