Key Retirement group director Dean Mirfin (pictured) said while the majority of people seemed to be taking a “sensible” approach to their pensions, a large number in the 55-59 age groups were withdrawing cash now.
He said: “The real trends we are seeing are in the main people are being sensible with their pensions. Those with more modest pots are being sensible and retaining those benefits for income.
“Many see equity release as a prime supplier of capital in retirement and their pension as the provider of income, be that flexible or guaranteed. Will this change over time?
“One thing which is clearly evident is that the core of cash withdrawals are being made by the 55-59 age group. The impact for those consumers in the future is unknown, they may need to be more reliant on property equity than ever before.
“The equity release sector is increasing more than any other and their are no signs that pension freedoms are impacting on that growth, rather if they are it is in a positive way,” he added.
Prefer to borrow
Pension freedoms came into play in April 2015, allowing anyone over the age of 55 to access their pension all at once, as a lump sum.
Steve Cox, business development director at Hodge Lifetime, says while pension freedoms give customers more choice many people are still looking to borrow rather than access their pension cash.
He said: “From continued growth in the equity release market overall and the huge customer demand we see for our over 55s residential interest-only mortgage, it appears people are still driven to borrow at affordable rates rather than use capital from pension pots.
“As time moves on, customer behaviour may evolve, but as we’ve said many times before, demographics and huge maturities of interest-only mortgages from the high street will drive later life lending as a whole upwards for the foreseeable future.
“Customers having choice and access to funds under pension freedoms makes it even more important that advice is taken to get the best possible outcome,” he added.