Pensions: retirement funding or inheritance pots?

Retirees on holiday

Most UK adults see their retirement savings as a means to enjoy later life rather than as an inheritance to pass on to children or relatives.

A survey of 1,000 adults across the UK with investible assets of over £100,000 found that a fifth of parents that have retired or plan to retire do not intend to give their children any of their retirement savings - and 69 per cent said pension savings should not be seen as an inheritance, but rather as a means of enjoying later life.

This comes despite recent changes making pensions much more tax-efficient to pass on as an inheritance.

The numbers vary regionally, with parents in Wales and London more likely to view retirement savings as a means of passing wealth to the next generation. Respondents in the north of England on the other hand were more likely to say their pension pots were for them to spend in their later years.

UNDERSTANDABLE

Nick Fitzgerald, head of financial planning at Brewin Dolphin, says: 'It is understandable that a growing number of people who have worked hard all of their lives are looking to enjoy the fruits of their labours in retirement.

'Around 40 per cent of people we have surveyed have either withdrawn lump sums from their pensions or plan to do so in the future.

'This is all very well but a worryingly low number are seeking professional advice before they do, which could lead to serious consequences such as unnecessary tax bills or running out of money later in retirement.'

Just under one in 10 respondents said they plan to leave all their retirement savings to their children or other family members - although this number was lower in the north of England (7 per cent) and Scotland (2 per cent).

Read more: What happens to your pension pot when you die?


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