Sensible savers shun the fun for pension funds
HARGREAVES Lansdown yesterday gave the first hint of how pensioners have reacted to newfound pension freedoms introduced last month – by being sensible and investing the cash.
The investment company, led by boss Ian Gorham, revealed record results for the first four months of the year, driven by new pensions business.
Gorham said early indications suggested pensioners were using their money wisely and buying investment funds with more yield and income.
“People are being very sensible but for us that’s not a surprise,” he told City A.M. “If people have been sensible to build up a pot of money throughout their lives and have that commonsense it would be strange for them to spend it all at once.”
Former pensions minister Steve Webb previously suggested pensioners could use their savings to buy a Lamborghini.
New rules were introduced by chancellor George Osborne to scrap rules forcing people to by an annuity with their pension savings. The change came into force on 5 April.
Hargreaves, listed on the FTSE 100, saw off the wider drop in retail fund sales this year to report record results for the four months ending April.
Assets under administration were to record £55.3bn, up from £49.1bn at the end of December.
Revenue for the 10 months ending April also rose to £241m, up from £239.3m during the same period last year.