A meagre 19% of UK Trustees and sponsoring employers believe retirees will act prudently when making important retirement decisions, Broadstone Corporate Benefits, the independent pensions and investment expert, has found in a recent poll.
This is a significant drop from the 90% who thought they would behave responsibly when a similar group of Trustees were surveyed earlier in the year, in May 2014. BROADSTONE conducted a straw poll of Trustees and sponsoring employers at a recent seminar, entitled 'Flexibility, Choice or Penury?', held at their Baker Street offices on 5 December 2014.
OTHER SURVEY FINDINGS INCLUDED
- Nearly nine out of ten Trustees and sponsoring employers (88%) support the government's decision to expand pension flexibility, compared to 100% in May 2014.
- 58% of Trustees and sponsoring employers expect annuities to remain a key part of retirement planning, down from 73% in May 2014.
- 73% of attendees believe final salary scheme members will be tempted to take their transfer value and convert it into defined contribution so as to access the flexibilities announced in the Budget, an increase from 68% reported earlier in the year.
Commenting on this, David Brooks, Technical Director at Broadstone, said:
"We are surprised at the huge drop in Trustee confidence of members' abilities to act responsibly for the long term, as a result of the Budget changes. However, it is apparent that the increased flexibilities are viewed favourably by the majority of the industry. As a result, we believe there needs to be a major educational exercise to ensure members are making the right choices for their future retirement needs.
"Despite the scaremongering that has occurred in the consumer press over the past months, it is apparent that many pensions professionals still see the value of annuities as a core element when deciding members' retirement options."