Customers have turned to the internet and phone in the early days of pension freedom and choice as providers establish increased direct relationships with scheme members.
Nearly 1,000 Standard Life customers settled their benefits themselves online, having gone through web-based risk warnings in the first day and a half of the new freedoms, the first day of which was a bank of holiday.
Standard took 3,000 telephone calls over that period, with customers spending an average of 30 minutes on calls, while Aegon, which took over 3,000 calls on April 7 alone, dealt with its customers in an average of 7 minutes. Aegon says call volumes were up nearly 42 per cent on the calls received on the previous Tuesday, 31 March 2015, with almost 50 per cent directly from customers, compared to 30 per cent typically.
Standard says the majority of callers are taking time to consider their retirement options rather than simply making an immediate decision, with customers in some cases choosing full or partial encashment to either pay off debt or to invest in property. Some customers want to cash in their pension due to their poor state of health with others intending to finance a wedding or to purchase a speedboat, says Standard.
Aegon says 40 per cent of the calls it received were in relation to valuations and quotes, higher than the usual average of 25 per cent. It says 70 per cent of the calls were answered within 20 seconds, with an average speed of answer across the entire day of 46 seconds.
Aegon chief operating officer Tommy Young says: “Call volumes on the 7 April were up 70 per cent compared to the first day of the tax year in 2014, with the majority of calls being from customers looking for plan valuations and retirement quotes. While call volumes were higher than usual, they were in line with anticipated levels and as a result there was minimal impact on the experience and the service our customers received.
“We also saw a higher proportion of calls coming directly from customers, as opposed to advisers which might be down to it being holiday season. However, it also demonstrates a level of customer interest and engagement we’ve never seen before.
“Surprisingly, we’ve received a number of calls from customers expecting to be able to sell their annuities now, despite this still being under consultation.
“We’ve also received a number of enquiries from customers thinking they will be able to access their retirement savings immediately, just like they do their bank account and expect to be able to withdraw money as and when they like without having to complete any forms.
Standard Life head of pensions strategy Jamie Jenkins says: “We are pleased to see so many customers using our new online retirement services but, for some, they want to have a conversation with our experts. The length of these conversations is much longer than normal, but we think it is crucial to take the time to ensure that people are making fully informed decisions. “The main focus this week for those with very small pension pots is to understand their options to release cash, and it has been interesting to see the wide variety of reasons people have given – 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.”
A spokesperson for L&G says: “As anticipated calls are up, approx. by 30% on normal business levels and we are easily able to handle the increase in volume. Customers are clearly interested in the new freedoms, and are looking at their new options. Once customers have made a decision, and gone through the 2nd line of defence, we’ll be in a better position to be able to provide more detail on what customers are actually deciding to do.”
ABI director general Huw Evans says: “As expected, lots of customers are talking to their pension companies about taking out cash but providers are also seeing plenty looking at wider options. Many savers recognise this is the start of a new pensions era and are exploring how they can most benefit. There is no pressure to make hasty decisions to access a pension.”