Helping people with their retirement choices Michelle Cracknell 9 th October 2014

1. Helping people with their retirement choices Michelle Cracknell 9th October 2014

2. What we do • Free information and guidance to the public on pension matter • Help by resolving disputes between the member and the pension scheme • Access to pensions expert • 80,000 customers • Telephone, web chat, online and written • Mediation service

3. Who needs it Impact of the Budget Part of the landscape 3.

4. At retirement questions I have been told I must take advice but I cannot afford it • “Why am I being asked to shop around when I have a pension?” • Understanding gap of knowledge • Impenetrable language • Left too late • Tax-free cash is a key driver • Perception of need or cost of advice barriers • Practical issues – expat, working hours , If I don’t take the cash sum, how is the income taxed? I am in the Civil Service pension scheme. People tell me that I need to shop around. , I have two small pensions. I cannot find anyone who will offer me an annuity 15% of calls are “at retirement”

5. Budget questions I am in DB scheme. Can I transfer to a SIPP this year or do I have to wait till next year to take advantage of the new flexibility rules? I also have DC pension pot. If I transfer it to a SIPP this year will I lose out on the new flexible rules? I retired 2 years ago and have sufficient pension provisions in place that I was able to put a substantial amount of funds into an Investment portfolio. Is my understanding that I will be able to withdraw some or all of these funds, paying tax. I do use an IFA but your comments would be appreciated. I have a Pension through X with £14,000 fund. The Budget said you can withdraw all of the money if it is a low amount. X said that I cannot as it is not that sort of pension. Can you help me? I have a pension fund of ~£1m. I can take 25% tax free. If I leave the balance invested, can I take 25% of increase in value tax free? I have an AVC with Z. I ask about taking out lump sum and/or transferring it to another pension scheme. Zereplied telling me how much it will be worth to transfer and sent me the forms to fill in. I am 56 and have £500000 in my pension. Can I now withdraw all of it now and what would the tax rate be?

6. Budget Bear traps DB to DC cliff edge decision Default behaviour being “take cash and put it in bank account” Scams and unregulated investments offers Tax and tax rate on rest of fund Drawdown with no personal “interest”

7. Content of the guidance “AT RETIREMENT” GUIDANCE These are the areas that we believe need to be covered : • Needs and issues • retirement plans • family and relationships • health • priorities • Resources • private pensions • “lost” pensions • State pensions • other savings • outstanding debt • Options and Action plan • short list options • signposting • Guidance is NOT regulated advice. It does not recommend a definitive course of action. It signposts people to the next steps that are likely to be most suitable for their personal situation • Guidance is a conversation that opens peoples minds to think about their needs and issues, the resources that they have available and the range of options they should investigate further and how to do this.

8. Delivery of the guidance “AT RETIREMENT” GUIDANCE How do we make it a success? Action orientated Signposting Output document Easy next steps Specialists Gravitas and knowledge with confidence to question and listen. “If you can’t explain it simply, you don’t understand it well enough.” Timely Right time Enough time Take up rate Drive it up Not operate walled gardens Personalised Filter options Cost effective Customer pays Existing model

9. Conclusion • Guidance is a starting point • Guidance should be delivered by specialists • Guidance needs to have clear signposting to next steps • Guidance does nothing, it is what is done with the guidance • We need to work together to help the customer

10. Thank you for your attention