The Department for Work and Pensions has announced that they plan to steer people towards taking Pension Wise guidance when they seek to access their pension. They have also published research by NatCen Social Research that explores attitudes of people who have accessed Defined Contribution pension pots since the start of pension freedoms 5 years ago. Earlier this year, the Association of British Insurers (ABI) published a report, Five years on: Future-proofing the freedoms, calling for more safeguards and support to prevent risks to consumers now and in the future.
Yvonne Braun, Director of Long-Term Savings and Protection at the ABI said:
“People now have far more flexibility in retirement thanks to the pension freedoms, but we still have lots to learn about the impact and success of the policy. DWP’s measures to increase the number of people receiving guidance when looking to withdraw from their pensions are welcome but there is more that can be done to tackle the advice and guidance black holes. As recommended in our future-proofing the freedoms report, there needs to be a shift in the regulatory boundary so pension providers can offer more support to customers when they make retirement decisions.
“We won’t know for years whether the pension freedoms have been successful. The research by NatCen is a helpful contribution to improve our understanding of people’s circumstances and attitudes toward their retirement in light of the freedoms. Industry, government, regulators and stakeholders must continue to work together and tackle issues like not planning for later life retirement and underestimating life expectancy.”
Recommendations published in the ABI’s report on future-proofing the freedoms included:
- Regulators should use the greater flexibilities post-Brexit to adapt rules on guidance and advice to achieve a step change in the support available to customers.
- The Money and Pensions Service should develop a later-life review to help people plan during their retirement.
- The industry will undertake more research into how people can be supported to make sustainable withdrawals to ensure they don’t run out of money prematurely.
- The Government should set up a Retirement Commission to advise on policy changes needed for good customer outcomes in retirement.
In November, the ABI are hosting a webinar on Future-proofing the pension freedoms: what next? with speakers including Work and Pensions Committee Chair, Rt Hon. Stephen Timms MP and Sheldon Mills, Interim Executive Director of Strategy & Competition at the FCA.