According to Investec Wealth & Investment, only 15% of pre-retirees said they will spend more as a result.
Despite fears that the new rules will lead to reckless spending, the vast majority (81%) of people aged 55 to 64 who have saved regularly into a private pension plan to take a cautious approach to funding their retirement.
The study analysed attitudes among pre-retirees towards spending on non-essential luxuries when they finally give up work. Over two-thirds (69%) intend to spend their retirement funds on holidays and travel in the first ten years of their retirement while more than a third (36%) have earmarked home improvements. A similar percentage plan to eat out more, while just under a third (32%) have budgeted for a new car.
Contrary to fears that the pension reforms will spark a buy-to-let boom, only 5% said they plan to buy a second home.
Nick Gartland, Senior Financial Planning Director at Investec Wealth & Investment, said:
“Despite criticisms about pension freedoms encouraging irresponsible spending, this research shows this to be far from the case. The overall message is that the next generation of retirees is approaching retirement with caution, which is hardly surprising. Improved life expectancy means that pension pots will in many cases need to finance 20 or 30 years of retirement and that’s before the added pressure of having to support their children and grandchildren with house deposits and school fees.”
