06 October 2015
Standard Life: Six months on, people are keeping their pensions invested

Standard Life today reveals some trends in the retirement decisions of its customers, six months into the new pension freedoms and flexibilities.

No immediate need for income

  • Only 6% of Standard Life's eligible customers have made use of the new pension freedoms since 6 April - 94% choosing not to touch their pension pots and stay invested.
  • Two-thirds (66%) of people entering a drawdown arrangement with Standard Life since 6 April have taken their 25% tax free cash and have left the rest invested - rather than taking an income straight away.
  • The average pot size of those entering drawdown between April and August was £132,344.
  • In the five months from 6 April, Standard Life retirement experts have responded to over 146,000 calls from customers. 6,657 customers settled their benefits themselves using Standard Life's online support facility, which gives a comprehensive explanation of all retirement options, as well as relevant risk warnings.

Trends among those cashing in some or all of their pensions

Customers who have withdrawn some or all of their cash are spending their money on a wide range of things. The most frequent choices to date include, in no particular order:

  • Home improvements
  • Repaying a debt or mortgage
  • Having an emergency fund in the bank
  • Paying for a special occasion like a holiday or wedding
  • Getting children on the property ladder

Jamie Jenkins, Standard Life Head of Pensions Strategy, said: 'The overwhelming majority of our customers have chosen to remain invested, debunking initial predictions that those at retirement would cash in their pots hastily and incur a significant tax charge, leaving them penniless at retirement. What we're seeing in fact is calm, considered decision-making from customers.

'Choosing drawdown doesn't mean the same thing today as it did two years ago - it's an umbrella term covering many valid retirement strategies. Previously, for example, people with small pots might have bought an annuity, not because they needed the income, but because they wanted to access their tax free cash and an annuity was the only way to do so. Now they have the right to access their tax free cash while staying invested in appropriate funds, minimising tax and securing wealth transfer to future generations. We expect this new drawdown market to continue to grow as it supports all of the new freedoms.'

-Ends-

Media enquiries

For further information, contact:
Amy Cayzer, PR Manager, +44 (0)131 245 5307; amy_cayzer@standardlife.com

Notes to editors

  • You can access Standard Life's online retirement journey and retirement tools at the following links:
    https://www.standardlife.co.uk/c1/guides-and-calculators/retirement-calculator.page#/
    https://www.standardlife.co.uk/c1/guides-and-calculators/retirement-pathfinder.page#/
  • Standard Life is a leading long term investment savings business, dedicated to helping to build a more prosperous world and enabling people to have confidence in their own future. This has been important to Standard Life since it was established in Edinburgh in 1825.
  • Since then, Standard Life has been growing globally. Today, the Standard Life Group employs around 6,500 people internationally - through businesses in the UK, Europe, North America, Asia and Australia.
  • Around 4.5 million customers worldwide trust Standard Life with their financial future and the business is responsible for administration of £302 billion of their assets (as at the end of June 2015). Standard Life supports a further 20 million customers through its Chinese and Indian joint venture businesses.
  • The Standard Life Investments brand offers truly global asset management expertise with strong investment capabilities.
  • Wherever Standard Life operates in the world, it is motivated by a sense of responsibility. That is what has helped it be a sustainable business over the long term. Standard Life is proud to be listed as a leader for corporate sustainability in its industry in the Dow Jones Sustainability Indices (DJSI World and DJSI Europe).
  • In the UK, Standard Life offers a range of individual and group pensions, SIPPs, ISAs, annuities, life assurance, offshore bonds, investment management, wealth management, tax and estate planning services. By understanding and offering innovative products and the right support, Standard Life makes it easier for its customers and clients to plan ahead and feel more confident about the future.
  • Standard Life plc is listed on the London Stock Exchange and with around 1.2 million individual shareholders in over 50 countries around the world. It is one of the top 500 companies worldwide, by revenue, as listed in the 2015 Fortune Global 500.
  • You can follow Standard Life Group on www.twitter.com/StandardLifeplc

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