With just six weeks to go before the launch of the radical reforms to the pensions industry announced by Chancellor George Osborne in last year’s budget, a new report accuses the Government of not doing enough to prepare for their delivery, saying that ‘key policy detail’ is still missing.
The Association of British Insurers (ABI) has raised concerns about the Government’s delivery of the pension reforms, saying that not enough has been done to ensure that they have a ‘flying start’ when they go live on 6 April.
The reforms will give millions of people aged 55 and over the flexibility to take savings they have built up in defined contribution (DC) pension schemes out in cash and do whatever they want with the money. However, a spokesman for ABI said that the industry is still lacking absolute clarity in crucial areas, including new tax rules and on Pension Wise, the free guidance service for savers who want to know what flexibility they have with their pension pots.
He added that it is right that customers should have a meaningful set of choices when it comes to decisions about their retirement but also does not want them to be forced into believing they must make quick decisions, saying that they should understand that 6 April is the start of new freedoms, not a deadline.
The six key areas of concern for ABI are that there is still no telephone number for Pension Wise and no clear idea of how its guidance sessions will work. Moreover, no official modelling has yet been published on the numbers expected to use the service or how long they may have to wait.
Meanwhile, it is still unknown what the final tax rules on annuity payments to beneficiaries are or what the exact situation is on regulation of lump sum payments by trust-based schemes. In addition, the Financial Conduct Authority (FCA) has not yet produced rules for providers on how they should interact with customers.
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