7th April 2015
Hargreaves Lansdown says that of the few hundred calls the firm received on bank holiday Monday about the pension freedom reforms some 7.7% are thinking of taking all their pension in one go.
The firm says it has had 150,000 requests for information over the last year but says the bank holiday combined with the good weather means that things have got off to a relatively slow start.
Tom McPhail, head of pensions research says: “It will take some time for a clear pattern to emerge in terms of how investors are looking to use the new freedoms. However a couple of things are already immediately apparent.
“Investors saving with a pension company which doesn’t offer a full range of choices are going to find themselves at a disadvantage and may have to move their money to get what they want. Initial demand has been focused on an investment income rather than buying an annuity, though we do expect this balance to swing back to some extent in the weeks to come.”
McPhail says that relatively few people are asking to take all their money out. He adds: “We’ll be tracking the sums involved however in the main we expect it to be at the smaller end of pension pot sizes.We remain concerned that the Government has not set in place a consistent industry-wide tracking system to monitor how these new freedoms are used by investors.”
The firm has categorised the inquiries below
|Topping up / opening a SIPP||
|Taxation (of drawing a pension)||
|Ad-hoc lump sum withdrawals||
|Taking Tax Free Cash only||
|Taking all their pension out in one go||