Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Moody's - Climate Risk Insurers series
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • Sections
  • News

Pension industry raises concerns around withdrawal behaviour

Open-access content Thursday 17th June 2021
Pension industry raises concerns around withdrawal behaviour

Withdrawal behaviours are among the top concerns of a third of pension providers in the UK, with two-thirds fearing this concern will grow as more people rely solely on a defined contribution (DC) pension.  

That is according to a new report from the Association of British Insurers (ABI), which reveals that pension industry experts fear that many people are withdrawing money without any advice or guidance.

Although there are valid concerns about unsustainable withdrawals, the report highlights how these are currently mitigated by the fact that most retirees have other sources of income, particularly guaranteed income from defined benefit (DB) pensions. 

However, the ABI said that future retirees will be much less likely to have other income to rely on, and many will be relying solely on a DC pension. 

It argued that a change in the regulatory rules for advice and guidance is “urgently” needed so that the majority of savers get advice around withdrawals, particularly as lockdown restrictions ease and more people look to access their pensions.

“We need to create an environment where people have far more support when taking decisions about accessing their pension,” said Yvonne Braun, director of long-term savings and protection at the ABI.

“This includes both increasing the number of people accessing PensionWise and enabling providers to offer more help. The report shows providers can and want to do far more to help customers, but to enable them to do it, we need a change to the rules around advice and guidance.”

Pension providers are currently limited in how much support they can offer without giving a personal recommendation, and therefore giving financial advice.  

The ABI said that changing this would enable providers to help pension savers with withdrawals by telling them about the implications of taking a lump sum, and talking a customer through what a sustainable income could look like.

Its report highlights how pensions providers have improved the support they offer by more tailored communication and greater use of digital channels. 

However, it said that the industry could go further still, by improving how pension options are presented to customers and define boundaries to shape decisions, so customer decision making is simpler and safer. 

“We need to act now to protect future retirees,” Braun continued. “Future retirees will be far more dependent on their DC savings than current retirees, the great majority of whom have DB pension income. 

“This means the decisions they make about their pension savings at retirement will be even more critical.”
 

Image credit: Shutterstock

Author: Chris Seekings

Filed in
News
Topics
Pensions
Finance

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Origination Analyst (Pensions to life)

London, England
£50000 - £80000 per annum + generous bonus + benefits
Reference
145979

Senior Pensions Data Specialist (Nationwide)

England / London, England / Greater Manchester, England, Manchester
£45000 - £80000 per annum + dependent on entry level & bonus
Reference
145978

DC Investment Associate/Consultant

England, London / Scotland / England
£45000 - £80000 per annum + generous bonus + benefits
Reference
145977
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2023 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ