Pension Freedom Update Winners & Losers

2015 pension rule change had many rushing to cash in their pension nest eggs at 55, but was it a good idea?

The changes made in 2015 to pension regulations, allowed UK Pension holders aged 55+ to access up to 100% of their Pension funds and take far greater control of their money, including how and when they took their pensions.

For many this greater flexibility was a great thing – winners

Either providing them with an immediate cash injection to their finances, maybe to clear unmanageable debts, or simply wanting to take control of their pension fund investment or to ensure their loved ones would inherit their entire pension.

Others lost benefits – losers

They paid unnecessary and unexpected tax bills and left nothing to provide for their retirement. Worse still, many have been the victims of scams and lost all or most of their life savings. Early pension release certainly isn’t advisable for most people.

Our research* is a must read if you are considering releasing your pension early or transferring in order to improve flexibility and take control.

The table below highlights the differences between the winners and losers:

Winners Losers
Got advice from an FCA regulated firm, which ensured they didn’t pay any unnecessary tax on the money they released early

Only invested their pension fund into FCA regulated investments, thus ensuring they weren’t a victim of a scam

Ensured any death benefits were paid to those they loved

Benefited and got peace of mind knowing the advice they were given meant they were protected, by law

Had time to read the report they were sent without being hassled

Given the freedom to ask technical questions and have them answered in a way they understood

Anyone that transferred their funds to a high risk non-regulated scheme and saw the value drop, or even worse, were the victims of a scam losing their entire fund

Took 100% of their pension without being told about the tax implications, then being hit with a significant and unexpected tax bill

Cashed in all their pension without being given advice about the consequences; now having to rely on the state pension to provide for them during retirement

Cashed in too much of their pension fund without advice, resulting in an unnecessary loss of their state benefits


Our research* has shown that Pension Freedom has been a great benefit for some, but sadly, not for others and certainly shouldn’t be seen as an easy way to raise cash.

The winners

These people took their time to make the right decisions and have considered a wide range of factors.

They made sure the firm they were dealing with was FCA registered and had been around long enough to have the necessary experience required. They were protected by law and had rights of recourse.

The losers

Unfortunately, there are too many people who didn’t follow the simple steps outlined above and ended up wishing they had made better decisions.

If you follow these five steps, you won’t be scammed:

  1. Check that the firm you are taking advice from is FCA regulated. You can easily look them up on the FCA register
  2. Check how long they have been doing this for and ask what experience they have. Again, the FCA register will tell you their Status Effective Date
  3. Make sure the advice you receive is provided in writing and you are given time to digest that information, without being rushed or pressurised into making a rash decision
  4. Make sure you understand what you are doing and have been told about the downsides as well as the benefits – don’t be afraid to ask questions if you don’t understand. Even get a trusted friend or family member to look at the advice as well
  5. And be careful, if the investment advice sounds too good to be true, it probably isn’t true. Only invest in FCA regulated investments

Why Transfer your Pension?

As part of our research*, we also analysed the reasons that people are releasing money from their pensions and transferring to new flexible schemes. The following are the most common ones:

  • Release cash to clear debts, or to make essential home repairs
  • Take control of their pension fund, make the investments that they think are best for their family to benefit
  • Transfer to release funds to invest in property or start a business
  • Transfer to ensure their family will benefit from their pension fund if they prematurely die – Many old schemes don’t pay out to grown up children or new partners.
  • Release cash to pay for essential travel – this could be to visit relatives abroad, or to make a trip that’s important to you personally that you can’t fund any other way

How do I find out more?

Grove Pension Solutions Ltd were established in 2007 and are an FCA regulated firm. Any onward investments we recommend are also FCA regulated – you can check us out here on the FCA register.

To start your enquiry please enter your details and we will send you our guide.

If you read the guide and would like us to look into your options, then simply complete the Enquiry Form at the back of the guide and post it back to us via FREEPOST.

You are under no obligation to proceed and you will not be charged if you don’t proceed with a transfer.

It is worth noting that our qualified advisers ARE NOT paid a commission. It makes no financial difference to them whether you proceed or not. They are monitored on the quality of their work and EVERYTHING goes through our compliance department for checking at every stage of the process.

This can leave you confident you are being given the best possible advice for you.

* – Source: Grove’s own research over 11 years covering thousands of clients.