I warned pension freedoms would backfire but didn’t expect this

Britons have embraced pension freedoms with gusto since they were unleashed in 2015.

The reforms liberated pensioners from the obligation to lock into a lifetime annuity at retirement. Instead they could use their pension as a cash machine from age 55, and that’s what millions have done.

I have no beef with the principle of putting people in charge of their retirement savings. After all, it’s their money.

Also, I accept that annuities are restrictive and were lousy value after interest rates crashed in the wake of the financial crisis.

Most retirees now leave their savings invested in drawdown, which allows them to benefit from stock market growth throughout a retirement that could last 20 years or more.

All of this is to the good. I accept that.

Yet pension freedoms were always going to be risky, and soon we will all be paying a high price for Osborne’s vote winner.

Just not in the way I expected.

A growing number of Britons are acting as if Osborne slashed the retirement age to 55.

Hundreds of thousands of workers aged between 50 and 65 left employment in less than two years, in what has been dubbed a silver exodus.

The problem has spiralled to the point where today’s Chancellor Jeremy Hunt is scrambling to offer the over-55s financial incentives to get back in the workplace. The country needs them back at work.

Some of these workers are quitting to go on benefits, while others are too ill to carry on.

But from my personal experience, plenty are funding their early retirement by raiding their pension savings, which thanks to George Osborne they can do from age 55.

Several friends in their mid-50s have magically come into money lately. How? By cashing in one or two pension pots.

That’s an incredibly dangerous thing to do.

At age 55, we can expect to live for more than 30 years on average.

Unless you have a very big pension and are very, very careful, it’s simply isn’t going to last that long. Especially at the rate my friends are spending it.

Freedom is a wonderful thing, but it comes at a price.

People are having fun today but at some point we are all going to pick up the bill.

Don’t say I didn’t warn you.