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Managing my financial journey
Managing my financial journey

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3.2.5 The UK pensions revolution

In this video, Martin Upton and Jonquil Lowe answer questions posed by learners on pension schemes and the reforms to pensions that have given those approaching retirement greater freedoms to access and use their pension ‘pots’. The video was recorded shortly before the reforms took effect in April 2015.

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Activity 3.2 Risks arising from the pensions revolution

What risks do you think are associated with the reforms to pensions introduced in 2015?

How might these risks be mitigated?


A number of potential risks come to mind:

  • pension pots may be spent quickly, leaving people short of income in retirement
  • decisions may be made that are tax-inefficient (significant parts of the pension pots could be lost to income tax)
  • the access to pension pots may result in some pensioners falling prey to investment scams
  • the alternative assets that pension money is invested in (e.g. property or shares) may fall in value.

Risk mitigation can be achieved by seeking financial advice and from taking guidance from such resources as Pension wise [Tip: hold Ctrl and click a link to open it in a new tab. (Hide tip)] The Money Advice Service (MAS) and Age UK.