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Standard Life reports ‘unprecedented’ demand following pension freedoms

Standard Life says it has experienced an “unprecedented level of customer contact” since the introduction of the pension freedoms this week.

Despite Monday being a Bank Holiday, the provider says it has taken over 3,000 calls so far. In the same time, nearly 1,000 customers used Standard Life’s website to make a decision on how to use their pension pot.

Telephone conversations took an average of around 30 minutes and “some” customers choosing full or partial withdrawal planned to use the cash to pay off debt or invest in property, the firm says. Other reasons for taking cash included poor health, paying for a wedding, and buying a speedboat.

Standard Life head of pensions strategy Jamie Jenkins says: “We are pleased to see so many customers using our new online retirement services but, for some, they want to have a conversation with our experts. The length of these conversations is much longer than normal, but we think it is crucial to take the time to ensure that people are making fully informed decisions.

“While it is far too early to draw any definitive trends, as expected, the main focus this week for those with very small pension pots is to understand their options to release cash, and it has been interesting to see the wide variety of reasons people have given – everything from paying off debt to purchasing a speedboat. It serves to remind us how varied people’s lives are, and in turn the potential benefit of having more flexible access to their pension savings.”

Government-backed guidance service Pension Wise has received around 3,600 calls since its call centre opened two weeks ago. Some 1,400 people have booked telephone conversations with The Pensions Advisory Service and 400 have face-to-face appointments with Citizens Advice.

The Government says Pension Wise has capacity for 10,000 appointments a week in April, and over 400,000 appointments a year.

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. Julian Stevens 9th April 2015 at 9:10 am

    The predicted dash for cash seems to have been on the mark. So far, I’ve received only one approach from somebody planning to encash (and he hasn’t even reached his 55th birthday yet). I asked: And then what? which stumped him a bit. What d’you mean? What are you going to live on when you retire? Errr… Amazing though it may seem, he really hadn’t thought to ask himself that question and I suspect that the thinking of many, many others is similarly short term. What most of these folk should be doing is not cashing in their pension funds but ADDING to them. These new unlimited access freedoms are a Pandora’s box of woes in the making.

  2. Perfect for the next miss selling campaign though so FCA and FOS will be delighted with future predicted increases. Life companies can then cash in when public awareness shows there being a huge black hole in typical pension income. UK Financial Services set to thrive in true bubble and burst style and the public will be blamed for short term-ism while releasing the government from an impending pensions disaster. Long stop would be incredible useful if you chose to play this game.

  3. Not enormously surprised about this but in reality are these numbers that high? Bearing in mind the number of pension plans Standard Life must have on its books I suspect this is quite a small percentage, what would be more interesting is how the numbers of enquiries compare with the longer term average.

    As regards “Other reasons for taking cash included poor health, paying for a wedding, and buying a speedboat” Poor health is totally understandable but I hope Standard Life pointed out that on death it would be tax free, as regards speedboats, I think that is in the article as it makes a good headline, but as speedboats vary from £3,000 to £30,000, if it’s only a small pot then why not? Personally I would get a Harley.

  4. Julian
    You may have actually put your finger on a vital point.

    As you may recall I have often maintained that advisers are not nearly fastidious enough when accepting clients. Indeed from what I have seen many should have been turned away after the first phone call. But perhaps we should be asking clients to complete an intelligence test as well as the risk questionnaire and fact find? This could well prevent much grief and safeguard your PII premiums.

  5. We have seen a large increase in calls after 3 days in and they fall into three camps:

    1. The take the cash and run. Most would be insistent clients or similar and we all know where that leads. FOS claims and FSCS throwing our cash around like it is xmas all because the poor dear did not understand if he spends all his pension now he/she will retire in poverty (shock!). What? No cake and eat it – I hear you say?? Only in the compensation world. Best to avoid like the plague.

    2. The throw back to the 1980/90’s – come and ‘sell’ me a pension after I get in from work/ walk the dog/ had my tea/etc. Again a disaster waiting to happen because they are too busy to take their affairs seriously. Avoid like the plague as they have compensation written all over them because they did not listen/did not understand (so they claim!).

    3. The normal client as I call them. Intelligent and pretty well read on the changes but smart enough to know they need professional help. Normally middle manager to professional and oddly enough normally in the finance fields private and public sectors. I did not expect that. Now they are the people we like and want to deal with and I suspect given the hour long waiting to answer a pension hotline for clients going direct (not joking) then we are perfectly placed as IFAs to take the strain and deliver an outstanding service.

    As for 1 and 2 above – we will continue to turn away for fear of catching the pox and being stuck with a bill

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