The Budget presented by Chancellor George Osborne this week received a mixed reception from the charity Age UK.
Charity Director Caroline Abrahams stated that the rigid pensions system had become increasingly out of step with the modern world.
She added that she hoped the more flexible approach the Chancellor announced in his Budget would help to revitalise pension saving and give younger people greater hope of security in retirement.
Abrahams stated that Age UK particularly welcomed the immediate change which will allow millions of people with several small pension pots to draw their money in cash, adding that it was a change the charity had been in favour of for years.
She went on to say that the charity heartily approved of the new guidelines designed to give pensioners and those approaching retirement impartial financial advice, so that they are better able to make an informed decision about their retirement.
However, Abrahams warned that whilst significant changes had been made they did not amount to a panacea, and that the Budget had done nothing to help the 1.6 million pensioners living in poverty.
She also said that the Chancellor’s speech had done nothing to help address the crisis in social care.
Joanne Segars, chief executive of the National Association of Pension Funds (NAPF), described the announcement made by the Chancellor as perplexing.
Segars explained that whilst Automatic Enrolment was one of the largest and most successful reforms of workplace pensions ever seen, it came about because of experience suggesting that people were often ill-informed and made poor decisions regarding financial planning for their later years.
She warned that people often underestimate how long they will live and overestimate how long their pension pot will last.
This could risk people taking their pension pots as lump sums, but that, having done so, the money will run out much faster than expected.