Standard Life sees sharp rise in pension inquiries

Standard Life has reported a sharp rise in customer queries after the launch of sweeping pensions reforms that will see millions of retirees weighing up whether to cash in their savings.

The company, which is one of the UK's big pension providers, said it has taken nearly 3,000 calls and a further 1,000 have used its online service to access their pension savings, since the changes came into force on Monday.

Standard Life said that some customers had partially or fully cashed in their pensions to pay debt, invest in property, or, in one case, to buy a speedboat.

As of April 6, anyone aged 55 and over in a defined contribution pension scheme can take their savings as a cash lump sum.

Other large pension providers are also reporting a surge in inquiries. Legal & General said on Thursday its customer call volumes were up 30 per cent.

Scottish Widows, part of the taxpayer-backed Lloyds Banking Group, said on Tuesday that its call volumes were three times their normal level and it expected the trend to continue this week.

The snapshots provide an early insight into how millions of UK consumers are reacting to rule changes whereby people are no longer effectively forced to buy an annuity - an insurance product that guarantees an income - when they retire.

While providers saw a sharp rise in queries, the government's free guidance service for savers, was underused last week. The "Pensions Wise" scheme reported that bookings for the service, which opened nearly two weeks ago, were not at capacity.

Ros Altmann, a pensions expert and the government's older workers business champion, said: "We really do need a campaign to promote the booking line for Pension Wise."

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Jamie Jenkins, head of pensions strategy at Standard Life, said these conversations with customers were "much longer than normal".

While it was far too early to draw conclusions about definitive trends, he said, "the main focus this week, for those with very small pension pots, is to understand their options to release cash".

He added it had been interesting to see the variety of reasons people gave for cashing in - "everything from paying off debt to purchasing a speedboat".

"It serves to remind us how varied people's lives are, and in turn the potential benefit of having more flexible access to their pension savings."

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