Personal Pension  

Further evidence of providers keeping schtum

Further evidence of providers keeping schtum

The majority of well-off pre-retirees were ready for last week’s reforms, but with no thanks to their pension providers, according to research by Retireeasy.

The independent financial planning tool surveyed its user base - who have average private pension assets of £146,000 - and found that 54 per cent have still not received any communication from their provider about the pensions freedoms.

Anonymised data from a representative sample of 1,572 pre-retirees post April 6, showed that only 34 per cent of them have proactively heard from their providers and 8 per cent from their advisers about charges for deducting funds early.

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Despite this, 68 per cent of pre-retirees were aware of these charges and, as a result, only 28 per cent plan to withdraw funds before they reach 65. Even then, 90 per cent are only going to withdraw a maximum of 25 per cent of their pension fund, which they can receive tax-free.

Proactive research by pre-retirees also resulted in 78 per cent of them being either fully or partly aware of the difference between capped and flexi-drawdown.

The day after the reforms came in, FTAdviser reported research by PricewaterhouseCoopers, which found that only 36 per cent 50-75 year-olds have been contacted by their pension provider prior to freedom day.

The professional services firm surveyed over 1,200 people during March and found this figure falls to 26 per cent in the low-wealth, small pension pot demographic. It was still only 48 per cent in the high-wealth, large-pension category.

Mark Soper, an IFA and co-founder of Retireeasy, said their research showed that pre-retirees are not as confused and worried about the pensions freedoms as many would have us believe.

“Saying that, it is obvious pension providers and advisers need to do more if they want to engage with this relatively wealthy demographic. There is a wealth of future business here if institutions will only reach out responsibly and honestly with their customers.”

Over 90 per cent of those surveyed do not plan to buy an annuity with the remainder of their fund, while a similar proportion - aged 58 on average and plan to retire partially at 61 - said they would supplement their income by working part-time in retirement.