Labour hits out at government complacency leading to “pension crisis”
Labour has slammed the government for failing to take action over pensions on the back of a survey finding that three in five people taking money out have no plans for care in old age.
The survey from Citizens Advice found more than half of people who have taken money out under new pensions freedoms haven't planned for future care costs.
Three out of five have not considered how they will pay such costs, with one in ten hoping to rely on family or the government.
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Debbie Abrahams, Labour’s shadow work and pensions secretary, said: "The Tory government has failed to ensure workers understand the hidden costs of pension schemes, and have independent, good quality advice available to help them make informed decisions about their retirement needs which may include the cost of being cared for.
"There is a real risk their complacency will lead to our next pension crisis when people who have taken too much out of their pension pot, or have been subjected to multiple hidden charges, find themselves short of money and unable to afford the care they need in their retirement."
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Gillian Guy, chief executive of Citizens Advice, said: "Care costs can be a heavy financial burden that many people are unprepared for… this issue does need some attention, otherwise people risk dipping into their pension now only to find they need some of the money later."
However, data from the Association of British Insurers last week found that only a fraction of savers raided pension war-chests, providing evidence that Britons are not nearly as weak-willed as was feared after pension rules were relaxed a year ago.
A Treasury spokesperson said: “It is only right that people have real freedom and choice over how they access their hard-earned retirement savings and our pension freedoms are proving to be a great success.
“To help people make informed decisions, including on the costs of care in retirement, the government set up the free and impartial Pension Wise guidance service which over 2.8m people have accessed since April 2015.”