Increased interest in unlocking DB benefits, but not in Pension Wise


Five months on from the introduction of the pension freedoms, providers have been looking at the latest trends in the industry. Fidelity Worldwide Investment has pulled together the top five trends seen among customers so far…

  • Interest in unlocking DB benefits rises– since the freedoms, around every one in 14 calls to Fidelity is from a customer who wants advice on their DB scheme and how they can best use it under the flexibilities. This month saw these numbers double to 14% as retirees explore whether cashing in their benefits is a good idea.
  • Topping up cash and reinvestment equally most popular use of cash withdrawals – in line with July, reinvestment of monies continues to be popular with the same number of retirees also seeking to top up their income.
  • Debt repayment remains a key theme for retirees – paying off secured and unsecured debts continues to be a core activity for retirees.
  • A retiree’s home is their castle – property never fails to capture British imaginations and this can be seen in usages for cash withdrawals. In July, house purchases made up 8% of this group however, in August this figure rose to 15% with an almost equal split between those who want to buy for their own use and those who want to invest in Buy-To-Let.
  • Pension Wise take-up remains muted – amongst Fidelity's customers, only 9% use the service before coming to Fidelity; a figure that is in line with May and July at 10% although June saw a peak of interest at 20%.

Richard Parkin, Head of Retirement at Fidelity Worldwide Investment comments: “The August period continued to see a steady stream of calls from our customers looking to chat through their options or action their plans. While interest in Pension Wise remains low, feedback from our customers shows that people who do use it, are finding it helpful which is encouraging.”

“In terms of core themes, DB benefits and how you can access them has been right there since the freedoms and, in my opinion, this will continue as people are still getting to grips with their true value. Likewise, debt repayment and reinvestment remains popular along with property purchase. However, while it’s peaked this month, if you look at this overall, it would seem unlikely that we will have an entire generation of retirees seeking to become property moguls. For now it looks like many are simply taking advantage of the flexibility that pension freedom offers.”