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Third of pension savers in limbo about plans for retirement pot

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One in three Brits with a pension are still in limbo about how to use the cash, just two months before new rules giving them the freedom to do what they want come into force, a survey has shown.

New rules in April will scrap the requirement of savers to purchase an annuity with their lifelong savings, under reforms introduced by chancellor George Osborne.

BlackRock polled 2,000 people in the UK and found 28 per cent are undecided about how they will respond to the changes.

But in a sign of support for the shrinking annuity sector, 26 per cent said they would buy an annuity – but only after a period of withdrawing regular amounts from their savings. Just three per cent said they would “treat” themselves.

Osborne caused havoc in the annuity market last March when he scrapped the compulsory purchase rule, prompting a slump in annuity sales by insurers.

The survey suggests a substantial number – one in every five of us – will shun an annuity and invest the money elsewhere.

BlackRock head of UK retail Tony Stenning said: “What will be crucial here is to make sure they have the right roadmap ahead of them to generate the income they will need.”