as they don't realise they'll have to pay tax on withdrawals under new freedom rules

Hundreds of thousands of savers could be heading for a tax shock at retirement because they fail to understand the new pension freedom rules being introduced by the Government. Many people with defined contribution pensions are labouring under the illusion that they will be able to access their retirement pots tax-free from next April, according to Fidelity's head of retirement insight Alan Higham. People will be given unrestricted access to their pension pots provided they're above the age of 55, but Mr Higham estimates that around three-quarters of people who contact Fidelity do not realise they will still have to pay marginal income tax on withdrawals. He said: 'We suspect 75 per cent of our customers think this and when they call we will hand them over to one of our guidance and planning experts and risk making ourselves unpopular by explaining to them they what they will really have to pay. 'We believe we have to look after our customers and prevent them making mistakes we wouldn't want to make ourselves.' Full details of the new pension rules are still being formulated, with the Government currently in consultation with the industry as it seeks feedback on its proposals......Read more here