Pension Freedoms Day Saw Fewer Enquiries Than Expected
When the new pension freedoms came into force yesterday, pension companies were prepared for a barrage of enquiries. Instead, only a few hundred made the most of their new freedoms yesterday.
While Pensions Minister Steve Webb said he wouldn’t mind if over 55s cashed in their pensions to buy brand new Lamborghinis or booked luxury curise ship holidays under the new freedoms which began yesterday, there was no obvious sign of roads being more cluttered by Italian sports cars than usual or of the seas bracing for a rush of Brits.
The fact that Pension Freedoms Day, as yesterday had been nicknamed, fell on one of the sunniest Bank Holiday Mondays in years will certainly have helped to calm the rush and avoid the phone lines of pension providers from being overly jammed.
The pension companies had drafted in extra staff to help cope with any major increase in enquiries, but it appears there were not as many enquiries as some had expected. Aviva, for example, reported a fairly quiet day at their call centre.
Furthermore, it seems that few over 55s are looking to take all of their money out of their pension pot in one go. Just 7% of callers yesterday were asking to withdraw their full pension pot, with 40% enquiring about drawdown.
As well as the new freedoms, the government’s Pension Wise service went live yesterday, a service which offers impartial advice to savers even if it cannot give proper regulated advice. 380 appointments had been booked for yesterday, while many more have now been scheduled for the coming days and weeks.
Overall, politicians such as Steve Webb – who had been emphasising that April 6th was not a momentous day itself - will be pleased that Pension Freedoms Day passed by without any major incidents. There had been fears that a rush of enquiries at midnight could have led to collapse of systems, but just like fears of a millennium bug in 2000, they have proven to be unjustified.
Photo credit goes to kansasphoto