Scottish Widows is hiring 400 extra staff to deal with the “April surge” as thousands of people prepare to take advantage of the new pension freedoms.
Speaking at a Headlinemoney debate in London last night, Scottish Widows chief executive Toby Strauss says the provider is expecting up to three times the normal volume of customers trying to access their pension pots after deferring their retirement plans in light of the Budget changes.
The company’s recruitment drive surpasses the Government-backed guidance service Pension Wise’s own hiring spree. It has previously been reported just 300 people are being hired across the different guidance channels, including The Pensions Advisory Service, Citizens Advice and the Treasury-run website.
Strauss said: “I think there’ll be a surge, we expect a lot of people who’ve already passed retirement date will take some cash out. We then expect it to settle down, but to what level we don’t yet know. It’s our view of what customers need. All our research tells us the majority of customers need to be talked through their options in order to make an informed choice, and we are very keen to make sure our customers don’t do stuff which after the event they regret because they didn’t understand what they were doing.”
He says all 400 staff will be employed to deal with enquiries from Scottish Widows customers and talk them through their options, including the tax implications of withdrawing cash and “pointing out that any cash they take out that they don’t use to buy an annuity means they’re not protecting against living longer”.
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 worried about it from a regulatory point of view, it’s a brand thing. The least risky thing to do would be to push people towards a website but we don’t think that’s in line with our brand values.
“The approach providers are taking does seem to vary a lot – from ’we don’t want anything to do with anybody, shove them at the website let them decide, we don’t want any risk’, through to the kind of things we’re doing.
“We’re not providing advice but the question for us is, did they understand their options and make an informed choice?”
Strauss says demand will determine whether the new staff are taken on permanently.