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Just 8% eye taking pension ‘in one go’; drawdown dominates – research

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  • 07/04/2015
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Just 8% eye taking pension ‘in one go’; drawdown dominates – research
Fewer than one in 10 of those with pension queries following the roll-out of the retirement 'freedoms' on 6 April were looking to withdraw their savings in full, research suggests.

While only 7.7% of calls to broker Hargreaves Lansdown concerned accessing their entire pots, some 42% were related to drawdown.

Just under 10% telephoned to discuss buying an annuity on the first day of the pension freedoms first announced by Chancellor George Osborne at Budget 2014.

Hargreaves Lansdown recorded the reasons customers telephoned on 6 April, though, with it being a Bank Holiday, it noted it only received ‘a couple of hundred’ calls.

 

What customers telephoned Hargreaves Lansdown about on 6 April 
 Topping up/opening a SIPP  8.2%
 Taxation (of drawing a pension)  8.7%
 Ad-hoc lump sum withdrawals  16.9%
 Drawdown  42.1%
 Annuities  9.8%
 Taking tax-free cash only  6.6%
 Taking all their pension pot in one go 7.7%

 

Hargreaves’ head of pensions research Tom McPhail said: “It will take some time for a clear pattern to emerge in terms of how investors are looking to use the new freedoms.

“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.

“Relatively few people are asking to take all their money out; we’ll be tracking the sums involved, however, in the main, we expect it to be at the smaller end of pension pot sizes.”

 

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