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Savers eye drawdown as pension freedoms become reality

Savers keen to use the new pension freedoms were most likely to ask about drawdown, according to a snap poll by Hargreaves Lansdown.

On the first day of the freedoms yesterday, some 42 per cent of around 200 telephone calls to the firm were about drawdown, 17 per cent were enquiries about making ad-hoc lump sum withdrawals and 10 per cent were about annuities.

Just 8 per cent rang to ask about taking all their pension in one withdrawal.

Hargreaves Lansdown head of pensions research Tom McPhail says: “It will take some time for a clear pattern to emerge in terms of how investors are looking to use the new freedoms. However a couple of things are already immediately apparent.

“Investors saving with a pension company which doesn’t offer a full range of choices are going to find themselves at a disadvantage and may have to move their money to get what they want.

“Initial demand has been focused on an investment income rather than buying an annuity, though we do expect this balance to swing back to some extent in the weeks to come.”

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There are 2 comments at the moment, we would love to hear your opinion too.

  1. So it looks like drawdown is going to become the norm – what happened to the demands of FSA that drawdown was high risk – all the extra reports we had to submit to FSA on drawdown case we had done – the extra reports we had to do on drawdowns under £100k,the extra premiums we had to pay to PI insurers because we declared we had done drawdown cases and shock horror that we had done 3 cases that was under £100k and now it is ok for one and all to do drawdown

  2. Had my first consumer contact me asking if he could take his pension in full on Bank Holiday Monday! I pointed him to PFS guidance saying e should not facilitate insistent clients if it is contrary to advice, which it would be as I know this chaps circumstances and have told him what I would advise before (i.e. annuity OR drawdown with security element for lifetime income needs).

    So now where does he go?

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