Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Moody's - Climate Risk Insurers series
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • September 2015
09

Adviser highlights top five pension misunderstandings 

Open-access content Friday 18th September 2015 — updated 5.50pm, Wednesday 29th April 2020

The pensions industry has been urged to educate the public about pensions following the identification of five savers’ misconceptions.

2

Pensions adviser Portal Financial said these misunderstandings involved issues such as tax, income and death benefits. 

The five misunderstandings are:

1. Taxable pension income. Portal Financial said savers did not understand income received was assessed against all taxable income for the year.

2. Tax-free cash. Under new pension reforms introduced in April, people are allowed to take the first 25% of their pensions free of tax. But the firm said people thought after withdrawing the first 25% they could take out another 25% tax-free next year. 

3. Income. Portal Financial said savers were unaware they could start taking an income from their pension before they reach state pension age, currently set at 65. Under the reforms, savers are allowed to withdraw income from their workplace pension once they reach 55.

4. Transferring out. Depending on the scheme, savers may need to transfer out of their scheme to release money, including tax-free cash. However, the firm said savers were unaware of this fact.

5. Death benefits. People are aware certain annuities provide a pension to a spouse when they die, but they are unaware drawdown and unused funds can also be left to beneficiaries.

Jamie Smith-Thompson, managing director at Portal Financial, stressed the need to educate the public and encourage them to save. 

He said: "Despite the increased level of debate around pensions following recent reforms, people are still confused. As an industry, we must find a way of providing clearer guidelines and more comprehensive information."

This article appeared in our September 2015 issue of The Actuary .
Click here to view this issue

You may also be interested in...

2

Retirement incomes are 7.9% lower than last year

Individuals retiring this year will receive an income 7.9% lower than those who retired in 2014, according to research.
Tuesday 15th September 2015
Open-access content
2

FTSE 100 top executives 'increasingly disconnected' from UK pension system

Senior executives of FTSE 100 firms are taking out cash in lieu of their pensions and this could undermine the pension system, the Trade Union Congress (TUC) has warned.
Monday 28th September 2015
Open-access content
2

State pension age should be flexible, says Corbyn

Labour leadership contender Jeremy Corbyn has said the state pension age should be flexible to allow people to work as long as they want to.
Thursday 3rd September 2015
Open-access content
ta filler

Payments worth £2.4bn made in first three months of pension freedoms

Savers have taken £2.4bn worth of withdrawals in the first three months since pension freedoms came into effect, equivalent to £27m per day, according to the Association of British Insurers (ABI).
Thursday 3rd September 2015
Open-access content
2

Just four in 10 UK employers plan to offer staff drawdown

Only four in 10 (43%) employers plan to offer staff a drawdown option as part of their pension plan, according to a survey.
Tuesday 1st September 2015
Open-access content
ta filler

Owen Smith appointed shadow work and pensions minister

Labour MP Owen Smith has been selected as the party's shadow secretary of state for work and pensions by leader Jeremy Corbyn.
Monday 14th September 2015
Open-access content
Filed in
09
Topics
Pensions
Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Senior Reserving Analyst

London (City of)
Negotiable
Reference
149485

Senior GI Modeler - Capital and Planning

London (Central)
£ excellent
Reference
149436

Risk Oversight Manager

Flexible / hybrid with a minimum of 2 days per week office-based
£ excellent
Reference
149435
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2023 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ