Friday 14th July 2006
Pensions experts have claimed that using a pension to pay for a holiday may not be the wisest use of the money.
Some 51 per cent of those retiring in the next five years are planning to draw out the maximum tax-free lump sum of 25 per cent of their pension, with a quarter expected to put it towards a holiday, according to GE Lifes State of Retirement Report.
However, with the majority of retirees saying they wished they had started putting money away earlier in life, there are concerns that an expensive holiday could put pensioners into financial difficulties.
"Obviously people will want to celebrate the start of their retirement, but its important to think about the long-term," said GE Lifes chief executive Scott Dolfi.
He added that with people living longer, retirees need to think even more about how they will cope financially with retirement.
"Spending on holidays may not be advisable if you will struggle on a day to day basis, which statistics indicate could be the case."
Putting the lump sum away in to a savings account is the second most popular option after holidaying. 
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