Commenting on the Treasury Select Committee Budget 2014 report published today, which includes a chapter on pension reforms and savings, Malcolm McLean, senior consultant, Barnett Waddingham, says:
“The Treasury Select Committee Report has rightly recognised the importance of the guidance guarantee that is to be given to consumers following the innovative changes made to pensions in the Budget.
“Describing the reforms as welcome and transformational, the committee has acknowledged that consumers will need considerable support in navigating a market which is undergoing major change and in which they are likely to be offered an array of new products.
“Its recommendations observe that the guidance must be impartial as to providers and type of product, include an opportunity to be face-to-face (at least initially), offered at least 12 months in advance of the consumers stated retirement date, be free at the point of use and clear to the consumer exactly what is being offered, its limitations and so on.
“This is all very sensible if not essential if the reforms are going to work as well as we all hope they will both in terms of giving consumers more freedom and flexibility in determining how to get best value from their pension savings and in encouraging others to join a pension scheme in the first place.
“But we should be in no doubt that getting the new system up and running by April 2015 represents a considerable challenge for all concerned and requires urgent decisions to be made as to who is going to deliver this new guidance, in what circumstances and in particular how the face-to face undertaking can be guaranteed across the country as a whole.
“The Government and the pensions industry must act in unison and move forward with speed and urgency to ensure that the the first batch of consumers available to take advantage of these new freedoms are not exposed to unacceptable risks, which unfamiliarity with the complex world of pensions can often bring.”
|
