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03/04/2014

Skandia, one of the largest pension drawdown providers in the UK, has revealed that less than 10% of its current flexible drawdown customers have taken, or are currently in the process of taking, the entire value of their pension savings.  These figures downplay fears that UK retirees will withdraw all their retirement savings at once when the Chancellor’s proposed changes, announced in the recent Budget, come into full effect in April 2015.

Reaction to the Chancellor’s changes has been overwhelmingly positive, with many, including Skandia, welcoming the move to providing more flexibility in how future retirees will generate an income from their hard-earned savings.

However, the idea that those in retirement will have ‘complete freedom to draw down as much or as little of their pension pot as they want, anytime they want’, has generated some criticism that this could lead to retirees depleting their savings in one go.

But Skandia, which has been providing retirement income drawdown solutions since 1995, has moved to dispel this concern.  Even within its capped drawdown business, where there are currently set limits on the maximum income available each year (recently increased from 120% to 150% of GAD), over 2/3rds of customers do not take the maximum income available. Many of the remainder are only doing so as part of a structured  phased retirement  plan which leaves as much of a client’s overall pension savings as possible untouched for delivery of future income.

Adrian Walker, retirement planning manager at Skandia, comments: “Fears of Lamborghini pension fund withdrawals are unfounded based on our experience of customer behaviour.  In the words of Voltaire (or Spiderman’s uncle), ‘with great power comes great responsibility’ and our data shows that the vast majority of people can be trusted with the greater freedom around accessing their pension savings. 

“It is significant to note that the overwhelming majority of our customers engage the services of a Financial Adviser. We therefore note the Chancellor’s plan to facilitate face-to-face guidance for all those approaching retirement and look forward to contributing to the Government’s consultation.”

For more information contact

Tim Skelton-SmithOld Mutual Wealth02380 916 99807824 145 076tim.skelton-smith@omwealth.com

Notes to editors:

Quilter is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

On a ‘go forward basis’, Quilter oversees £ 111.6 billion in customer investments (as at 31 March 2018).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset and single strategy investment solutions; and discretionary fund management.

The business is comprised of two segments: Wealth Platforms and Advice and Wealth Management.

Wealth Platforms includes the Old Mutual Wealth UK Platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.

Advice and Wealth Management encompasses the financial planning network, Intrinsic; Old Mutual Wealth Private Client Advisers; discretionary fund management business, Quilter Cheviot; and Old Mutual Wealth’s multi-asset investment solutions business.

The Quilter businesses will be re-branded to Quilter over a period of approximately two years following separation from Old Mutual:

  • Intrinsic to Quilter Financial Planning
  • Private Client Advisers to Quilter Private Client Advisers
  • The Multi-Asset business to Quilter Investors
  • The UK Platform to Quilter Wealth Solutions
  • The International business to become Quilter International
  • The Heritage life assurance business to Quilter Life Assurance
  • Quilter Cheviot will retain its name.

On 19 December 2017, Old Mutual Wealth announced that it has agreed to sell its Single Strategy asset management business to the Single Strategy Management team and funds managed by TA Associates. The proposed transaction is subject to customary closing conditions, including regulatory approvals. 

Quilter is part of Old Mutual plc, a FTSE 100 group that provides investment, savings, insurance and banking. For the year ended 31 December 2017, Old Mutual reported an adjusted operating profit before tax of £2.0 billion. For further information on Old Mutual plc and the underlying businesses, please visit the corporate website at www.oldmutualplc.com.

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