From April 6, over 55s in the UK will be able to draw a lump sum out of their pension, without the need to buy an annuity.
Financial service provider, Saga, believes this financial shake-up could significantly benefit the cruise industry, with more pensioners able to afford their dream holiday. Saga’s research discovered that 8% of pensioners who will be able to draw a lump sum from their pension are planning on spending their windfall on holidays. This figure, however, is significantly lower than the 14% of pensioners in Australia who have spent the funds from a similar scheme on dream holidays.
Tom McPhail, head of pensions’ research at Hargreaves Lansdown, believes this is an opportune circumstance for the cruise industry: “Undoubtedly some people will be looking to take money out and use it for discretionary spending such as cars and holidays. If I were in the business of selling luxury holidays, cars or home improvements then I’d definitely be sharpening my sales skills and looking for the over-55s now.”
With increased spending power for the over 55s and two of the world’s largest cruise ships debuting in the UK this year, 2015 is expected to be cruise industry’s strongest ever year in this country. Royal Caribbean’s Anthem of the Seas and the P&O Britannia will both call Southampton home after launching in April and November respectively. Both cruise lines have made significant efforts in recent years to attract a more varied demographic, offering amenities and features aimed at the whole family – but without compromising the class and sophistication which lures the older generation year after year.
A spokesperson from P&O Cruises confirmed the company and the industry as a whole is hopeful that these reforms will lead to a continued increase in cruise holidays: “People still want good value for money and certainly we would hope that there would be an uplift caused by the pension reforms.”
Original report via This is Money
Image Courtesy of P&O Cruises
