Retirees planning on drawing cash from their pension pots have been warned of the effect the Chinese stock market crash will have on their financial plans.
The impact from the global share falls will be felt hardest by pensioners choosing to live off capital lump sums by taking advantage of the new pensions freedom, according to Adrian Lowcock, head of investing at AXA Wealth.
To get the same amount of cash people will have hoped for several weeks ago, “you’ll need to sell a greater proportion of your pension,” said Mr Lowcock. But those who are still invested could also be hit. “Longer term, we could see corporate earnings impacted – which would affect dividends and the income generated by your pension pot,” he said.
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Danny Cox, at Hargreaves Lansdown, also warned that people spending too much of their pension capital could see their drawdown plan suffer irreparable damage.
Annuity buyers could also be hit because expectations for interest rate rises have also been pushed back.
