The Association of British Insurers (ABI) has published a new report which finds that pension industry experts are concerned many people are withdrawing from their pension without any advice or guidance, which may result in them running out of money in retirement.
Titled ‘Future Proofing the Freedoms: Supporting customer decisions about pension withdrawals’, withdrawal behaviours were found to be among the top concerns of a third of pension providers in the UK, while two thirds fear this concern will only grow in the future.
The trade body issued a recommendation that a change in regulatory advice is needed so the majority of consumers received support regarding pension withdrawals, instead of the minority.
Yvonne Braun, the director of Long-Term Savings and Protection at the ABI, said: “We need to act now to protect future retirees. Future retirees will be far more dependent on their defined contribution savings than current retirees, the great majority of whom have defined benefit pension income.
“This means the decisions they make about their pension savings at retirement will be even more critical. But we know 72% of people are unwilling to pay for financial advice and only 14% of retirees are using PensionWise.”
She added: “We need to create an environment where people have far more support when taking decisions about accessing their pension. 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.”