The average pension pot size reviewed on the company’s income drawdown calculators has shrunk by nearly £15,000 in 2014. Alongside this, the number of client pensions analysed for drawdown is at an all-time high, indicating a new set of clients are being considered for income drawdown.
In 2013 the average pension analysed in the company’s drawdown calculators was worth £177,472. A year on and with a raft of new pension changes about to come in force, Advisers are now reviewing pension pots worth an average of £163,112 – an eight per cent decrease from the year before. Furthermore the number of pensions being analysed for drawdown reached an all-time high in July according to an analysis of the company’s calculators.
This trend echoes last week’s ABI data which highlighted a 55%1 increase in drawdown sales since the Budget 2014 pension announcements. However whilst the ABI noted the average pension pot size is just over £50,000, Selectapension’s data found that it is still the larger pots that are primarily being targeted for drawdown.
The technology provider has also seen a significant change in the assets selected by Advisers using the critical yield calculator and usage of default funds is beginning to fall. This has led to sustained growth over the year with Advisers choosing specific funds and sectors for their client’s pension funds. This trend again echoes the move to Advisers identifying new alternative investment options for retirement funds.
Andy McCabe, Managing Director, Selectapension commented:
“Drawdown will increasingly be on the radar of Advisers following the ABI’s data and we can confirm that this year’s Budget has triggered more activity on our drawdown tools. The shake-up of pension rules should ultimately have a positive impact on Adviser and client relationships as Advisers have a perfect opportunity to demonstrate the need for professional, paid-for financial advice.
“When adapting to this new landscape of advice, Advisers should look to maximise the newest technology that is available to them to ensure they are securing the best outcome for their clients.”
