Since the starting gun was fired on pension freedoms on 6 April, there has been cause for both cheer and concern. Investors might not be clamouring to blow their pots on cars and speedboats, but the workplace pension market appears to be struggling to cope with demand for flexibility and smaller schemes are crying out for help from their larger counterparts.
There is no doubt that customers rushed to the phones in the first days of pension freedoms. Tom McPhail, head of pensions research at Hargreaves Lansdown, says that calls to the DIY investment platform reached into the thousands over the first few days. Pensions company Standard Life took 3,000 calls between 6 and 9 April, while rival Scottish Widows says it received a staggering 12,500 calls between 6 and 10 April. The company was bracing itself for two years of activity in the space of three months, bringing in 404 new members of staff to handle the increased demand.
But those hitting the phones were not all clamouring to cash in their entire pensions. Of the five options now open to pension investors over 55 - doing nothing, taking an annuity, opting for flexible drawdown, taking lump sums from their pots (with the first 25 per cent tax-free) or cashing in everything - the majority appear to be opting for flexible drawdown.