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Scottish Widows hires 400 staff to cope with ‘April surge’

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.

Scottish Widows has previously admitted it has faced service issues and delays and recently warned the industry was close to breaking point in dealing with the impact of the Budget announcements.

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.

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. They will need 400 extra telephone lines as it takes about an hour to get through now. Scottish Widows just will not be able to cope their service standards are so bad. Getting ready for April will probably be a dream they are not in the 20 century alone the 21st

  2. The above comment accords exactly with my own thoughts on the matter. I recently obtained a set of comparative quotes for an enhanced/underwritten annuity and breathed a huge sigh of relief upon finding that Scottish Widows offered no quote. The case we put to them a year ago was an absolute nightmare.

    And what are these new staff going to be able to tell people who want to access their funds as a tax-assessable lump sum? They won’t be able to provide advice other than to seek out exactly that with an authorised and qualified intermediary or, at the very least, avail themselves of the Government’s Guidance Guarantee.

    If they don’t, Scottish Widows will surely be laying themselves open to complaints later on from people claiming that they should have been warned of the negative consequences of encashing and then blowing their fund instead of applying it to secure a sustainable lifetime income. It won’t be very different from those who may have signed the paperwork for an uncompetitive standard in-house annuity without having been steered towards advice on possibly better options in the open market.

    A classic example of such a scenario is a client I have at the moment who’s been all fired up to encash his pension fund, whereas I can get him an enhanced/underwritten annuity rate of 6.5% p.a. Furthermore, in view of his overall income position, the annuity will be tax free because his entire income will fall within his Personal Allowance.

    Life is never simple.

  3. Jamie Smith-Thompson 21st January 2015 at 12:40 pm

    Some of the language being used in this article is a bit worrying if it has been taken in context.

    Highlighting the tax implications of withdrawing cash is one thing, and quite sensible in my opinion, but “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” is a different matter. That obviously depends on what they intend to use the cash for and on their wider circumstances.

    This clearly falls into the realm of regulated financial advice, which I somewhat doubt these 400 new staff are being trained to provide. I would certainly be worried about it from a regulatory point of view if I were Mr Strauss.

  4. Once SW have finished with them they should be perfect candidates to move on to CA/ PAS!!

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