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Need to get more retirees online

Retirees rush to take cash from pensions says Aegon

Adrian GraceAegon has seen a big surge in customers wanting to take part of their pension in cash following the flexibilities introduced in April.

Assets held by the Edinburgh-based provider that are now in drawdown – being turned into cash – have doubled in the past year.

Adrian Grace (pictured), chief executive said: “The pensions industry has experienced huge changes in the last twelve months and this continued into the second quarter as the pension freedoms were implemented.

“We’ve seen a surge of interest from customers in the new pension flexibilities. Assets in drawdown have doubled over a year as customers seek income flexibility. While we expect drawdown to continue to prove popular, our research indicates 70% of people approaching retirement want some form of guaranteed income.”

“Those with larger pension pots are keeping their savings invested, as you’d expect, but many with smaller pots are opting to take their savings as cash. More than half of the cash requests we’ve received have come from customers with savings of £10,000 or less.”

Assets under management increased 125% in the first six months of the year compared to the same period last year as the business focused on extending its digital proposition.

“We’re pleased with the quarterly earnings which remain significantly ahead of the levels we were seeing a couple of years ago,” said Mr Grace.

However, he said there was a need to encourage more retirees to move to online services as this encouraged people to get more involved in managing their pension.

“Online banking has proved hugely popular but just 11% of the population currently manage their pension online,” he said,.

“By giving people a pension they can manage on their phone or tablet, we want to boost engagement levels.

“Technology is allowing us to provide employers with better insights about the savings patterns of their workforce.”

Aegon now has more than 150,000 customers on its platform including more than 45,000 upgraded to platform over the quarter to enable them to benefit from a pension that they can manage online.

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