Consumers calling into providers Zurich and Aegon have triggered risk warnings and displayed ignorance about pensions, highlighting the importance of independent financial advice, according to Tommy Young.
The chief operating officer of Aegon UK said customers asked “a lot of questions” since 6 April as the life and pension provider fielded hundreds of calls from people keen to get their hands on their pension cash.
Mr Young said: “Surprisingly, we’ve received a number of calls from customers expecting to be able to sell their annuities now, despite this still being under consultation.
“We’ve also received a number of enquiries from customers thinking they can get their retirement savings immediately, as with their bank accounts, and expect to withdraw money as and when they like without having to complete any forms.”
Zurich received more than 3,000 enquiries from customers on the first day of the pension freedoms - 10 times the normal daily level.
More than nine out of 10 customers enquired about withdrawing a single or partial lump sum, with only a small number of customers enquiring about entering their pension into drawdown or purchasing an annuity.
Of the callers, just over 400 had taken guidance or planned to take guidance from Pension Wise.
Rod McKie, head of retirement propositions at Zurich, said seven out of 10 callers triggered personalised risk warnings under Zurich’s second line of defence.
As of midday on Thursday 9 April, Jamie Jenkins, head of pensions strategy at Standard Life, said his ‘retirement experts’ had taken more than 3,000 calls since phone lines opened to customers on Monday.
However, Mr Jenkins said the conversations his staff had with 3,000 customers showed that people had taken the time to consider their retirement options rather than simply making an immediate decision.
Conversations with customers averaged about 30 minutes.
Mr Jenkins said: “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.”
Lee Lummis, managing director for Cheshire-based Avacade Future Solutions, said: “The Budget and the pension reforms that were announced in 2014 and early 2015 have provided a valuable impetus to savers and pension planners, but education and support is now needed so that appropriate financial planning can happen.”