View more on these topics

Scottish Widows to bulk switch customers to new default fund

Taylor-Ronnie-Standard Life-2013

Scottish Widows is to move its pension customers en masse to a new default fund that assumes they will go into drawdown or remain invested into retirement.

The provider says just a quarter of its customers have purchased annuities since the pension freedoms came into force, rendering its default lifestyle strategy out of step with most savers.

As a result, customers with more than five years to go before retirement will be moved into funds that are targeted at entering drawdown arrangements.

Advisers, employers and members are being written to ahead of the changes taking effect in three months’ time.

Customers will be able to opt out and instead pick a fund that aims at providing cash or an annuity.

In February 2015 Money Marketing revealed the provider had launched a non-advised drawdown product for savers with pots worth £10,000 or more.

Scottish Widows pensions director Ronnie Taylor says: “For customers to make the most of the new freedoms, they really need to think about the way they want to use their pension fund in later life at least five years before their retirement date and ensure they pick an investment glide path to accommodate it.

“But despite our best efforts to draw attention to the issue, many customers remain disengaged and, where this is the case, we believe it’s important and in their best interests to take action on their behalf.”

Taylor adds: “Unlike many other providers, our products have been designed in a way that allows us to make changes as part of annual governance reviews, which has enabled a bulk switch to a more appropriate default fund.”

Recommended

Scotland-Flag-Scottish-700x450.jpg

Scottish Labour plans state pension top-up for 80,000 women

Thousands of Scottish women who missed out on the flat-rate state pension would be compensated under plans unveiled by Labour. The new £155 a week single-tier state pension introduced this month is designed to simplify the system so people have a better idea of the foundation on which they build their auto-enrolment savings. However, due […]

Lloyds eyes Scottish Widows acquisition spree

Lloyds Banking Group is reportedly plotting a spree of acquisitions for Scottish Widows. Sky News report the bank has held a beauty parade of investment banks as it plans to embark on a spate of purchases for the provider. Lloyds has reportedly engaged management consultant McKinsey to assist in identifying assets for acquisition. It is […]

NATIXIS PORTFOLIO CLARITY – UK Portfolio Barometer

Natixis Global Asset Management’s quarterly Portfolio Barometer offers insights into UK financial advisers’ model portfolios and the allocation decisions they are making. Natixis’s Portfolio Research & Consulting Group works with financial advisers and other intermediaries to analyse and enhance their model portfolios and help them develop investor portfolios suited to today’s complex markets. The Portfolio […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Leave a comment