More people have cashed their pension pot entirely after consulting Pension Wise (28%), when compared to those who have not utilised the service (17%), new research has revealed.
According to data from the Department for Work & Pensions (DWP) published in its Pension Wise Service Evaluation 2017/18, 25% of people who have used the Pension Wise service have proceeded to use their retirement savings to provide themselves with a guaranteed income. In comparison, 28% of those who have not used the service went on to purchase a guaranteed income.
Furthermore, 14% of Pension Wise users are less likely to spend their savings on a luxury item, compared to 36% of those that have not consulted the service.
Commenting on the findings, Hargreaves Lansdown senior analyst Nathan Long said: “Those who’ve had a Pension Wise appointment do more retirement planning and are less likely to blow their pension on a luxury item, but it’s curious that Pension Wise users are also more likely to take their pension as cash and less likely to choose a guaranteed income in retirement.”
When assessing overall satisfaction of the Pension Wise service, 92% of consumers were pleased, while 23% have recommended the service to others.
“The people using Pension Wise are finding it to be a useful resource, with high satisfaction levels and many recommending the service to their friends,” Long added.
The research found that 72% of Pension Wise appointment customers continued to calculate their income needed in retirement, compared to just 34% of non-users. In addition to this, 65% of Pension Wise appointment customers have consulted a financial adviser, tax adviser or accountant following. This figure is almost three times more than those who have consulted an adviser without using the service (23%).
The Hargreaves Lansdown senior analyst concluded: “The role of guidance is only likely to grow in the years ahead, the challenge now is how the industry can work alongside Pension Wise to deliver a consistent, high quality service so the demand can be fully met.”
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