Pensioners ditch ASP for scheme pension - Rowanmoor

Scheme pensions are proving more popular than alternatively secured pensions (ASP), according to Rowanmoor Pensions.

The firm says this is due to the possibility of claiming higher income through scheme pensions, while still benefiting from income guarantees.

Since A-day, Rowanmoor has seen 69% of its clients aged over 75 choose a scheme pension, while the rest chose ASP.

The firm also expects to deal with a growing number of enquires for scheme pensions as Government Actuary Department (GAD) rates - the measure used to calculate ASP income - fall to an all time low.

Scheme pension incomes are separately calculated by an actuary, with Rowanmoor's own actuary using a 4.5% yield to determine the costs of the scheme pension, compared with 3.25% rates on gilts.

David Seaton, joint managing director at Rowanmoor Pensions, says: "Pensioners need to be given the full picture and made aware of all the alternatives, to make a reasoned decision as to how they wish their pension to be paid."

john.bakie@incisivemedia.com