Could retirees empty their pension pots?

There’s a warning to pensioners they could be leaving themselves in danger of emptying their pension pots too soon as new research reveals that many UK retirees risk depleting their pension savings nearly a decade before the end of their retirement, as some take large cash lump sums from their pensions and withdraw too much in monthly income.

This could be as a result of ‘The Lottery Effect’ – overnight access to large sums of money can trigger a psychological rush which can spark impulsive or unsustainable spending – similar to winning the lottery.

One in seven (15%) retirees viewed their pension lump sum as a financial bonus, while one in ten (10%) treated it like a payday and spent freely, according to new figures from Legal and General.

Ros spoke to psychologist & wellbeing expert Dr Emma Hepburn and Katharine Photiou, managing director of workplace savings at Legal and General.

Photo by Colin Watts on Unsplash