15th April 2015
Pension providers handled over 200,000 calls from customers in the first week following the introduction of the pension reforms, new figures reveal.
Data from the Association of British Insurers, shows that between Tuesday 7 and Friday 10 April ABI members received 229,932 phone calls from customers interested in finding out more about their pension options under the reforms. This was a 214% increase in average call volumes that would be expected during the period, equating to an average of 57,483 calls each day.
After a peak on Tuesday, call volumes fell but were still well above the average. Over 10,000 written and email requests were received each day, more than double the average.
Rob Yuille, ABI’s manager for retirement policy, says: “Unsurprisingly many customers, recognising the importance of the reforms, are contacting their pension provider to understand how the changes may affect them. Insurers have taken steps to meet this demand, and will continue to explain to customers their options, and encourage them to speak to the free, impartial Pension Wise service before taking any action.”
The ABI says that providers’ experiences in the early days have underlined that, for customers wanting to take cash, there are three important points they should consider to help them make an informed decision:
PENSION WISE Even if customers think they’ve made up their minds about releasing cash, it’s still important they speak to Pension Wise and their provider to make sure they understand all the implications. People should be sure they will have enough money for their retirement if they cash in their pension now.
TAX Savers turning their entire pension pot into cash could face a sizeable tax bill, reducing the amount of money available to them. Customers who want to release several lump sums should expect to see emergency tax imposed on these payments, which they will then need to reclaim from HMRC. The tax system works by taking tax up front and correcting any over-payments later.
VALUABLE PENSION BENEFITS Customers with a valuable guarantee in their pension, such as a Guaranteed Annuity Rate (GAR), are required by the Government to take financial advice before they can transfer or take cash, if these safeguarded benefits are worth £30,000 or more. This is to ensure they are aware of the value of this option before deciding whether to give it up.