Pension confusion set to leave teachers unprepared for retirement
Teachers are still confused by pensions, according to new research. Almost two-thirds (61 per cent) do not understand the key features of their pensions, and 93 per cent are not sure how much to save each month.
One in 12 (eight per cent) incorrectly believe they can withdraw their full pension fund at any time, completely tax free, while the amount they believe they will need each year in retirement has fallen from £26,389 in 2014 to £22,467 in 2016.
According to the findings, two-fifths (40 per cent) haven’t done any research about pensions in the past year, while a third (34 per cent) have no intention of researching their retirement plans in the next 12 months either, suggesting those in the dark will remain confused about what lies ahead.
The research also found that three-quarters (75 per cent) of teachers are unaware how much the government contributes for every pound invested in a pension.
While they may not apply to all teachers, 70 per cent don’t understand the pension freedom reforms put in place last spring, despite the extensive publicity surrounding their introduction more than a year ago.
Overall, one in 12 (eight per cent) teachers incorrectly believe the reforms mean people can withdraw their full pension fund at any time, completely tax free. One in six (17 per cent) believe it is only possible to take a sum from a defined contribution pension after retirement.
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