Drawdown  

Lockdown sees clients wait for months to access pension

Lockdown sees clients wait for months to access pension

Three quarters of savers have had to wait a month or longer to access their pension savings during lockdown, with advisers also experiencing significant delays.

Research from consolidator PensionBee, published this week (July 22), found out of 961 people aged 55 to 70 surveyed, more than one in five had had to wait more than three months to receive their pension, while 14 per cent could not access their money for five months or more.

The survey, which was carried out in April at the height of lockdown, also found pension provider inefficiency may contribute to unnecessary withdrawals, with 58 per cent of those who considered accessing their pension saying they would be more likely to leave it if there was easy access. 

Meanwhile, advisers have faced similar barriers and have noticed providers have been taking longer to respond to their requests.

Andrew Pennie, head of pathways at Intelligent Pensions, said the firm had experienced “significant delays in recent months” from some providers when trying to access pension information.

Mr Pennie said: “Some of these delays are unacceptable and some providers have much to do when it comes to delivering an acceptable and timely service to clients and advisers alike.”

He added: “We understand there are processes and procedures which must be followed when enabling a client to access their pension savings, this includes explaining potential risk warnings to help avoid mistakes and potential scams. 

“As such, a month or so is probably acceptable but significantly longer than that certainly isn’t and could cause some people real financial hardship. Providers should be looking to identify potentially vulnerable clients and help them wherever possible.”

James Sculthorp-Wright, strategic development director at Atkins Ferrie Wealth Management, said some information requests were taking several months.

He said: “During the coronavirus pandemic there has been a significant worsening of this situation, with some providers being almost uncontactable. 

“Thankfully, our ongoing independent research means we are always able to recommend pension providers who offer excellent customer service.”

Provider contact

According to the research, very few people said their pension provider had contacted them to explain the implications of the coronavirus pandemic on any pension decisions.

Only 10 per cent said they had been contacted by their provider to explain the implications of the pandemic, while only 7 per cent had been prompted to seek financial advice or guidance before entering drawdown.

A mere 11 per cent said they felt well supported by their pension provider to make decisions about their pension during this time. 

But Billy Burrows, director at Better Retirement, has found the majority of providers to be efficient and helpful during lockdown.

Mr Burrows said: “Generally speaking the providers who have combined good use of technology with intelligent people at the end of a telephone line are quick and efficient. However there are still providers using lots of manual processes with less intelligent people manning their enquiry lines and these firms are generally very slow.