Equitable Life ramps up team as 1,500 seek April withdrawals
Closed book life company Equitable Life is bringing in dozens of staff in the weeks leading up to pension freedom day on the 6 April, as its own internal research revealed thousands of customers are set to accelerate taking their benefits to coincide with the rule changes.
Equitable Life is set to increase its customer service team’s headcount by 40, taking the total number to 240, FTAdviser can reveal. Ten new staff started on 1 March, whilst 10 more are due to start next week and a further 10 the following week.
Internally, 10 staff will either work longer hours or move departments to cover the customer service enquiries brought about by the reforms.
The move follows on from a similar, albeit larger, hiring announced by Scottish Widows, which revealed in January it is recruiting 400 staff to help it cope with expected demand.
Chris Wiscarson, chief executive at Equitable Life, said that the firm wrote to all its policyholders in January because it had a fairly good idea of what the pension reforms would look like.
Since then he said around 1,500 policyholders “who we would not have expected normally to take their benefits” responded stating they would like their benefits in April. Past experience suggests demand will be even stronger than this, he intimated.
Mr Wiscarson said: “What happened almost a year ago is that the Equitable increased its capital distribution…we significantly increased benefits to policyholders when they retire last year, April last year.
“We flagged to policyholders about six months before that we were considering making an increase to their benefits and what we observed immediately is quite a number of policyholders who would have otherwise taken their benefits deferred taking them until April.
“We are seeing exactly that phenomenon this year in regard to the pensions reforms and we can see that policyholders who we might have otherwise expected to take their benefits since October aren’t and so you see this fall off of retirements.”
Mr Wiscarson added that another area the firm was unclear about, alongside others, is to what extent all the publicity that will take place over the next few weeks will be a catalyst for policyholders to either take their money or ask for a quote, and it is currently hard to gauge what their behaviour will be.
“It’s going to get much more attention in the next four to six weeks but whether policyholders actually respond to it…this is not a once only offer, this is forever, that you can take your retirement benefits in cash.”
Pension minister Steve Webb has said the government hopes people will “stay in bed” on 6 April and not rush to take their benefits in the immediate aftermath of the reforms coming in, saying at an FTAdviser event last week “if you have no reason to do anything, then you do not have to do anything on 6 April”.
ruth.gillbe@ft.com
