Pension providers are
expecting to take as many as 40% extra calls from customers next week as
thousands of over-55s try to take advantage of new rules which come into force
in one week’s time and allow them access to their retirement savings.
However, despite the anticipated surge in customer inquiries, a
Guardian survey found that half of the major pension providers will not be open
for business on Monday 6 April, a bank holiday.
Almost all of the 12 major pension
providers surveyed have taken on extra staff to cope with demand, with one,
Scottish Widows, anticipating up to two years’ worth of inquiries in the first
few months of the freedoms coming into effect.
“We strongly recommend that customers
take their time and not rush these decisions too quickly given the complexity
and risks involved,” said a spokesperson for the company.
Another, Royal London, said it expected
to take 14,000 calls next week – 4,000 more than it would usually handle over
the same period. Meanwhile, rival firm Zurich said it expects more than 2,500
calls about pensions freedom in the first week of the reforms.
However, while companies such as
Fidelity, Scottish Widows, Standard Life and Aviva will open for business on 6
April, Royal London and Zurich will not take calls until the Tuesday, along
with others including Axa and the Pru.
In a sign of the confusion surrounding
the reforms one company, Fidelity, said it had seen an increase in calls from
customers in recent weeks “but these mainly come from people who believe that
the deadline to access their pensions is 6 April,” said a spokesperson.
From 6 April anyone over the age of 55 will be able to take what
they want, when they want, from their pension funds and will no longer be
herded into buying an annuity. Actuarial firm Hymans Robertson estimates that
as much as £6bn will be released from pension pots in the first four months of
the reforms.
However, the pensions minister Steve
Webb has said that people should not rush to do anything.
“If I had a single message for people
with a pension pot on 6 April it’s stay in bed,” he said. “Take the
grandchildren on holiday – it’s the Easter holidays for goodness sake. If you
don’t absolutely have to do something on 6 April why on earth would you?”
Those who do want access to their money
may be disappointed both with their providers approach and the cost.
The Guardian’s survey found that while
the majority of providers do not charge people to access their retirement
savings, some will. Royal London, for example, will charge a one-off fee of
£184 to take money out via flexible drawdown while Friends Life will allow four
free withdrawals a year but will then charge £20 a time.
Other providers, such as Virgin, will
not be offering customers the ability to access their cash over time. Virgin
customers will either have to cash in their full pot or transfer their funds to
an annuity provider or other pension scheme.
The government’s Pension Wise service,
which will provide free advice to retirees, will be open for appointments on 6
April.
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