Pension flexibility needed more than ever: Skandia

The pensions retirement expert for Skandia said: “The shift in expectations surrounding retirement has meant that product providers need to show more flexibility in their offerings and often take a different approach to what retirement looks like.”

He said that with more people continuing to work beyond retirement age, and some into their 70s, it was important providers thought about developing a range of products that allowed people to carry on making contributions.

Skandia’s retirement route planner tool recently revealed that more than 20 per cent of people now list their expected retirement age as 66 or above. This is a 5 percentage point increase since January this year, which 15 per cent of people expected to carry on working past 65.

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According to data from the Office for National Statistics published in June this year, within two years more 65 to 68 year olds in the UK will be in work than not.

Skandia is part of Old Mutual Wealth, an wealth solutions and asset management provider, managing £75.2bn of investors’ money as at 30 June this year.

Provider view:

Skandia’s collective retirement account assumes continued contributions up to the age of 75 with the flexibility of bringing a retirement date forward, rather than starting with the assumed retirement age of 65. The collective retirement account also allows phased retirement options, so individuals can use their pot as required to supplement any employment income.

Adviser comment:

Mark Ireland, financial planning consultant for Hertfordshire-based Richmond House Financial Services, said: “I believe the range of products available to clients at this stage in their lives is comprehensive, what with drawdown pensions giving income and lump sum flexibility regardless of whether they actually retire, Isas and other investments which mostly give flexible options for withdrawals or income generation.

“However, an area that may need to be addressed would be the ability to either take out a new mortgage product or extend an existing loan if someone needed to postpone the repayment, especially in an interest-only arrangement.”