“These latest figures do little to ease concerns about transparency and competition in the retirement income market. Shopping around and switching rates are too low with most people sticking with their own provider for both drawdown and guaranteed income for life purchases. This is something that the regulator is aware of and is determined to tackle, through initiatives such as better comparison tools. These figures come at an opportune time because they should help inform responses to the Retirement Outcomes Review consultation which closes next week.
“It is worrying that so many people are stripping out cash well before they reach State Pension Age – of the 276,761 accessing pension pots in the last six months, more than seven in 10 are below age 65 and 60% of them are emptying the pots completely.
"In addition, there remains low take-up of guaranteed annuity rates (GARs) that can deliver two or three times the income available elsewhere on the market, a windfall in the current economic climate. That suggests too many people are making complex decisions without advice or guidance. This figures provide further evidence to strengthen the case that the government’s free impartial guidance service Pension Wise should become the default option for anyone accessing their pension who has not received regulated financial advice.”
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