An announcement published by the Financial Conduct Authority (FCA) yesterday (1 July), states that over one million calls to insurers were made in the first month of the pension freedoms being in place.
This represents an 80% increase year-on-year, and a significant rise in activity since the pension reforms came into force.
The statement also explains that the FCA has requested that pension scheme providers supply information about how they are dealing with the freedoms, and should be signposting savers to the Pension Wise service.
In the announcement, the FCA notes the re-launch of its ScamSmart campaign in March, which serves to highlight pension scams to savers. Since its initial launch in October 2014, 100,000 people have visited the ScamSmart website.
The statement reads: “To date we understand that the majority of people have been able to take advantage of the new freedoms without any significant problems.
“In the first three months, many of the people looking to access their pensions as a result of the new freedoms have smaller pots, typically under £50,000. Many of these smaller pensions have been taken as cash. Early indications from our supervisors are that retirement risk warnings are being delivered and that call length for consumers has reduced from 10 minutes to 8.5 minutes.”
Tom McPhail (pictured), head of pensions research at Hargreaves Lansdown, said: “It is clear that some sections of the pensions industry are still struggling to meet customers’ demands. Call wait times of 3.5 minutes to 4.5 minutes and abandonment rates of 16% to 20% are quite shocking when you consider that investors have entrusted their life savings to these organisations.
“Investors have a right to expect a decent level of service when dealing with their retirement savings. There is an urgent need for pension firms, the government and the regulators to work together to resolve these problems for the benefit of pension savers.
“The success and popularity of the pension freedoms is an opportunity for the pensions industry to show that it is able to give its customers a 21st century service. This means putting the customer first.
“There’s a lot more work to be done, for example on pension transfer times which can still result in delays of several weeks before investors can get control of their money.”