Retirement Income Market Data

dunstonh

Here are some stats from the FCA for June-Sept 2015 on retirement income options taken up

This is done by obtaining data from product providers on a quarterly basis.

 178,990 pensions have been accessed this quarter which is 13% less than the previous quarter
 68% of these pensions were fully cashed whilst 32% were used to generate an income – this is similar to the
last two quarters where the majority of pensions were fully cashed
 88% of those pensions that were fully cashed this quarter were from pension pots of less than £30,000
 68% of Guaranteed Annuity Rates were not taken up – these were mainly smaller pension pots as 79% had
less than £30,000 and 90% were in pots of less than £10,000
 71% of customers making partial withdrawals took less than 2% of their pot after tax free cash with
customers in the mid-late 50s taking most out
 58% of drawdown customers used a regulated adviser
 37% of annuity customers used a regulated adviser
 58% of drawdown customers stayed with their existing pension provider


Thought these would be of interest to the regulars.

Looking at those, the non-advised annuity purchases would be a concern from a regulatory point of view as this would suggest people are still paying in-house and not using the open market option. However, that said, it could be a stats issue as a client with an adviser using an in-house annuity with GAR may not have the adviser recorded against it.

kidmugsy

They are interesting without being all that revealing. We don't know what the money goes on e.g. clearing debt (including mortgages). Or even wasting it by gifting to children for mortgage deposits versus the delights of spending it on fast women and slow horses.

I have to wonder whether some people with GARs are just tossing away free money. I wonder how many of the cashers-in had other, larger pensions that they didn't cash in.

westv

Do I read it right that 60% of the pensions were worth under £30k?

robin61

[QUOTE=kidmugsy;69892985

I have to wonder whether some people with GARs are just tossing away free money. I wonder how many of the cashers-in had other, larger pensions that they didn't cash in.[/QUOTE]

I' ve got a small FSAVC with a GAR. But the GAR only applies if i wait until the date the policy ends and even then it is based on single life none increasing. If i want something even slightly different the GAR disappears. Which is fine if that' s what you want i suppose. Not so good if it isn't. Also even with a GAR the annuity these buy with small pension pots is still not big enough to make much difference so I can understand why these small pots are being cashed in.

brewerdave

To second the last poster -I had one (very small < £8K) DC pot with a GAR - But wasn't worth taking as it only applied to my life - they wouldn't apply the rate to joint lives - I've moved it to a SIPP after considering cashing it in.

Linton

westv wrote: »

Do I read it right that 60% of the pensions were worth under £30k?

I am sure you do read it right. However a good number of the people may have had more than one pension, the data seems purely about pensions, not people.

Also many of the people retiring now would have spent a significant part of their working lives during a time when DC pensions were unusual.

PensionTech

I'm rather interested in the use of PensionWise, which didn't make it onto the FCA's "front page" announcements. See page 17 here (numbered 15):http://www.fca.org.uk/static/documents/retirement-income-market-data-july-september-2015.pdf

Almost everyone who accessed their pots in any way was more likely to use a regulated advisor than PensionWise.

woolly_wombat

PensionTech wrote: »

I'm rather interested in the use of PensionWise, which didn't make it onto the FCA's "front page" announcements. See page 17 here (numbered 15):http://www.fca.org.uk/static/documents/retirement-income-market-data-july-september-2015.pdf

Almost everyone who accessed their pots in any way was more likely to use a regulated advisor than PensionWise.

The data on the use of Pension Wise appears to be unreliable.

See e.g. pages 14/15:

5.6 However, some providers in our sample were unable to provide data on how many of their customers had told them they had used Pension Wise. This is partly due to the data we asked for being more detailed than that which providers are required by our rules to record. Providers are only required to record whether a customer said they used Pension Wise when consumers are not using a regulated adviser.