Four out of five advisors recommend that pensioners and those entering retirement find another source of income, as pension cuts in the Autumn Statement are planned. This comes out of a survey conducted by Albion Venture, who found 83% of the 274 intermediaries asked, had advised clients to considered supplementing their pensions from an alternative source.
Similarly, two thirds felt that the planned cuts outlined in the Autumn Statement may undermine consumer’s faith in state pensions.
The proposed pension plans involve cuts to annual allowance from £50,000 to £40,000, and the lifetime limit will also be reduced from £1.5 million to £1.25 million. While this will technically provide pensioners with one more year of state pension from 30years to 31 years, as living cost rise, the reduced income may cause issues for some.
One such issue may be for some trying to obtain a pensioners mortgage. On a reduced state retirement income, some may struggle to get a mortgage application approved. As a result, it may be necessary that people plan to have an alternative source of income for retirement to ensure they are not turned away by mortgage lenders if their state pension cannot cover the payments.