There has been much focus and comment regarding the chancellor’s recent announcement, which is set to revolutionise the retirement market. Less focus has been given on the potential this change might have in influencing a positive savings culture.
Welcomed by the general public and commentators alike, the budget could also be viewed as a major stroke of political genius - given the potential short and long-term rewards for the government of course. Providing greater freedom and choice for consumers at retirement is however, a positive step forward, despite the risk of potential unintended consequences. The view that many of the 400,000 or so people retiring after 2015 will simply drawdown their hard earned pension pot to buy a Lamborghini is frankly ridiculous, if for no other reason, Lamborghini only manufacture around 1,700 cars a year!
In all seriousness, the likelihood the majority will ignore the need to generate income throughout their retirement is reactionary. On the positive, a greater focus may lead to increased savings contributions in the lead up to retirement. Future generations should also be more disposed to save for their future too. After all, if they really want a Lamborghini, they will need a sizeable pension pot.
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