Alastair Black, head of financial planning propositions at Standard Life, says that what is important – both before the referendum and now – is that customers understand the services and support they will need to retire with a good outcome.
“The prospect of Britain’s departure from the EU has simply added some new variables to consider. We believe we will continue to see a number of small pots being taken as cash with many people only having saved a short time as a result of recently being auto-enrolled.”
Elsewhere, Greg Kingston, head of communications and insight at Suffolk Life, believes that while there will be no direct impact from the referendum, there may be an associated risk with state pensions running alongside drawdown.
State benefits
“At present, the UK state pension only increases each year if the recipient is in the EEA [European Economic Area] or in a country that has a social security agreement with the UK. If this was to be reviewed then some overseas pensioners may see their state pension effectively frozen, as is the case with residents of Canada and New Zealand today,” Mr Kingdom adds.
While it is still unclear what impact – if any – the referendum will have on drawdown and the pensions industry, it is clear from this survey that the pension freedoms have led to more clients entering drawdown. The sharp uptick in clients over the past few surveys shows the appetite is there – the industry just needs to keep up.
Technology is evolving quickly and it is becoming ever more important for providers to continue to adapt to the changing environment. With more clients entering drawdown, it needs to be easy for them to get access to the money they want.
Whether or not providers agree, advice is key in this industry at the moment.
Vague guidance alone should never be enough for emptying a pension pot, so it is important for advisers to stand up and understand what their clients want.
