Its study among people aged 55 and over, with pension savings, shows 35% are either unaware or unsure about the overhaul due in April 2015 which will enable those in defined contribution schemes to access all of the accumulated pension fund however and whenever they like from the age of 55.
While 25% of a pension fund will continues to be available tax free, as a lump sum, the balance will be taxed as income meaning that if the pension fund is fully encashed income tax will be paid on three quarters of it, potentially taking many people into the higher rate and/or additional rate tax. The UK Chancellor George Osborne estimates HMRC will take an extra £1.5bn in tax next year as a result of the changes.
The MetLife research was conducted online between April 1 and 7 among a nationally representative sample of 568 adults aged 55 and over with defined contribution pension savings, by independent market research firm Consumer Intelligence.
It also found 27% of the sample admitted to having not heard or read about the pension changes while 8% did not know whether they had heard or read about the changes.
A switch away from annuities was also revealed in the findings, with 27% of savers definitely ruling out buying one before legislation is agreed while another 22% were unsure of retirement income plans.
A number of life companies have already reported post Budget announcement drops in annuity sales in the region of 40%, including Standard Life, Legal & General and Prudential.
MetLife said the lack of awareness underlines the need for increased consumer education on retirement income options in the run-up to new legislation and after. It added that it is working with pensions expert Dr Ros Altmann to highlight the changes and explore retirement income options.
Dominic Grinstead, managing director, MetLife UK, said: “It is easy for the pensions industry to assume that everyone is focused on the Budget reforms and thinking about what they need to do.
“In reality substantial numbers of people who need help and advice to navigate the new pensions flexibility are unaware that the industry has changed completely and they will now have the freedom to control their retirement funds.”
