Pension providers are pouring cash into customer and adviser services ahead of the “April surge” when thousands of over-55s are expected to find out what they can do with their pensions.
Last week, Scottish Widows revealed it has hired 400 extra staff to deal with enquiries from customers looking for information on the Government’s new pension freedoms.
Scottish Widows chief executive Toby Strauss says some providers are planning to take the “least risky” option of pushing customers towards online information but that a dedicated service is needed to protect the firm’s brand.
He says: “We’re not providing advice but the question for us is, did they understand their options and make an informed choice?”
Other providers have also moved to bolster resources.
Aegon says it has already hired 150 new customer-facing staff “to support the increased demands that changes to pension regulation will generate this year”.
A spokeswoman says: “In advance of these changes we also invested significantly during 2014 towards the automation of processes which will experience increases in demand to alleviate the strain on our operations. We will continue to monitor customer trends and recruitment levels to ensure sufficient capacity is in place to meet customer needs.”
She adds the provider has also invested in four days’ training for its 160-strong sales team “to get them up to speed on subjects including changes to tax, retirement legislation and the resulting challenges, responsibilities and opportunities for advisers”.
Standard Life says it has undertaken a recruitment drive since the pension reforms were announced in last year’s Budget, but would not reveal how many new staff it has taken on.
A spokeswoman says: “We believe we’re very well placed to deal with the expected surge in demand for help, guidance and execution in April and beyond. Straight-through automated processes have been under development for some time so we can cope with considerable scale to execute customer and adviser instructions; and we have been significantly upgrading our integrated digital and phone support service.
“We have highly trained teams of retirement experts supporting calls from advisers and customers and further considerable resources across our business particularly in the context of pensions knowledge and expertise. We have been augmenting our capacity and capabilities with recruitment activity which started in mid-2014, and cross-skilling our people to optimise the flexibility of our operating model to meet customer and adviser needs.”
Aviva and Prudential also declined to give specific details of their plans. A Prudential spokesman says the firm is “confident we’ll be able to deal efficiently with the likely volume of customer enquiries”, while an Aviva spokeswoman says it is considering increasing staffing levels for April but would be “guided by customer demand” at the time.
Fidelity Worldwide Investment head of retirement Richard Parkin says the firm is recruiting across the business, specifically within the specialist retirement team, to “significantly increase the people who can speak with customers”.
He says: “We want to have a conversation with everyone looking to cash out, the cash out decision is as if not more complex than buying an annuity.
“Obviously people coming through advisers have that support already but people coming direct to us just looking to take cash will also have a tool showing how much tax they’ll pay but we also need to have a conversation. The Government has made it as hard as it can to understand how much tax refund people will get.
“You’ve got to man the phones. A lot of people still think it’s all tax free. It’s pretty complex and you can’t just do it with a website.”
Paul Stocks, financial services director, Dobson & Hodge
Widows have had problems for a while but the freedoms are going to put a lot of pressure on all providers. There’s going to be massive uptick in interest in pensions in April, but in the longer-term it should drop off.