Business

'Delay' over workers' pension access

Cash Image copyright PA

Three fifths of in-house company pension schemes fail to offer flexible options for savers to take part of their pot as an income, consultants say.

Some 61% of trust-based pension schemes, used by big companies and overseen by trustees, have yet to offer flexible drawdown options, Willis Towers Watson says.

Rules in place for nearly a year allow savers to take some or all of their pension in cash from the age of 55.

Schemes are keeping to the rules.

According to the consultants, many trustees have been concentrating on fulfilling their legal duties, but not offering more flexible options to "draw down" an income, as seen in other pension schemes.

"Drawdown is one of the key ways of putting the new pension freedoms into practice and can be more tax-efficient than cashing out a pension pot in one go," said John Cockerton, senior consultant at Willis Towers Watson.

"In one sense it is concerning to see such limited access to drawdown currently, however many more trustees may be intending to facilitate access to drawdown but are still going through thorough due diligence or waiting to see how the provider market evolves.

"It is fair to say that trustees have had a lot of new regulation to contend with over the past year and, having prioritised implementing new legal requirements, they are now turning their attention to desirable but discretionary options like drawdown."

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