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Providers failing to ask customers how they will use pension freedoms

Pensions-savings-retirement-piggy bankThe majority of providers are failing to ask customers how they will choose to access their pensions, according to FCA data.

The FCA yesterday published data on its website about pension decumulation coming out of its 2017 Financial Lives Survey.

The data, which looks at all adults planning to access their defined contribution pensions in the next two years, shows up to 70 per cent have not been asked what they will do once they have accessed their plans by providers.

Only 2 per cent of those surveyed said some of their providers had asked them about their options  while 20 percent said all of their pension providers had contacted them about their potential options.

Just under one in 10 (8 per cent) said they did not know.

Those surveyed were also asked if they had advice from an adviser at a pension provider about their options for when they start to money from their pension pot.

Just over two thirds (67 per cent) said they had not had advice from an adviser at their pension provider.

Ten per cent said they had advice from an adviser at a different pension provider while 16 per cent got advice from an adviser at their pension provider. Nine per cent did not know.

The FCA also gave those surveyed a list of advisers and asked if they had received advice from them in the past 12 months about retirement planning.

For those who had not taken advice, 40 per cent said they decided they could make decisions on their own and 10 per cent said they couldn’t afford or did not want to pay the adviser’s fees.

Seven per cent said they did not know enough about advisers and what they offer, 4 per cent said they did not know how to find a suitable adviser and 1 per cent said they could not find a suitable adviser.

Asked if they expect their defined contribution pension to be the largest source of  in come in retirement, one third (33 per cent) said the state pension will be their single largest source of income, 21 per cent said their DC pot will be the main source of money and 15 per cent responded their final salary will be the biggest chunk of their retirement income.

Regarding whether people know how much annual income they will get in retirement, 44 per cent said they have a good idea, 28 per cent replied they have little or no idea and 17 per cent do not know.

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Comments

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  1. Robert Milligan 24th April 2018 at 12:03 pm

    Who ever at the FCA provided these figures wants taking to one-side, who on earth asks a client if an Adviser from a product provider has contacted them, surly, the Product provider requires prior written authorisation from the client to contact them, even existing clients!! And when did it become Regulatory Appropriate for a Product Provider to even make contact with a client of an IFA. The above article is fundamentally flabbergasting.

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