People considering cashing in their pensions should take proper financial advice and not make a snap decision, Richard Jones has warned.
The retirement director at Scottish Widows said that although the new pension freedoms marked a “watershed moment in terms of consumer attitudes to pensions”, it was important that people really knew all of their options.
“It is clear there is still a lack of understanding and certainty about what the changes actually mean and how they may affect consumers’ individual circumstances,” he said.
According to Mr Jones, of those customers who know what they want, calls are mostly about people wanting to cash in small pension pots, and many were unaware that they have had this right since March last year.
Scottish Widows also had some requests for partial pension encashment and flexible drawdown.
“Our message remains the same – people should not rush in and make a 30-minute decision on what to do with 30 years’ worth of savings,” he said.
He added that on 7 April, Scottish Widows was handling roughly 3,000 calls a day, three times the normal level, and more than 1,000 customer requests on its new retirement planning website.
Adviser view
Andrew Pennie, marketing director for Glasgow-headquartered Intelligent Pensions, said: “I do believe the advice industry will be the long-term beneficiaries of the new pension freedoms. By demonstrating good client outcomes and value for money they will help to rebuild consumer trust and make advice the ‘go-to’ solution for retirement planning.”
