Pension drawdown provider Skandia has stated that less than 10% of its current flexible drawdown customers have either taken or are about to take the entire value of their pension savings.
Skandia cited the figure as evidence that fears, following the pension reforms announced in the Budget, of those approaching retirement taking all their savings once they stop work have been overplayed.
The firm described the reaction to the pension reforms announced in the Budget as overwhelmingly positive, and said that many (including Skandia) welcomed the potential for greater income flexibility for those entering retirement.
However, Skandia did acknowledge that the ability of the retired to draw down as much or as little of their pension pot whenever they please had caused some to criticise the change and warn it could lead to retirees taking all their savings at once.
The firm has reported that, even within its capped drawdown business, more than two-thirds of customers do not take the maximum income they could.
Adrian Walker, retirement planning manager at Skandia, said that fears of pensions being withdrawn to buy Lamborghinis were unfounded, based on the firm’s experience of how its customers behave.
Quoting Voltaire (and Spiderman’s uncle), Walker said that with great power comes great responsibility, and that the data the firm possessed indicated the vast majority of people could be trusted with greater freedom to access their pension savings.
He added that it was significant that the majority of Skandia’s customers used a financial adviser, and that the firm noted the Chancellor’s intention for everyone approaching retirement to have face-to-face guidance about the options available to them.