“This document makes very interesting reading. Almost a year ago, the Chancellor announced that ‘no one would have to take out an annuity’ which caused significant disruption in the market and while today’s report reaffirms this, it does point out that ‘annuities are likely to be the best option for many individuals but they will need to become more flexible’. This is something that the industry has taken on board and is working hard to provide.
“However, the committee also acknowledges that the full range of decumulation options is unlikely to be in place in April 2015 and highlights that some may even be impractical in the longer term – particularly ‘cashpoint drawdown’. It also suggests that there is some uncertainty whether Pension Wise will be fully operational when the new pension freedoms become available. These factors add fuel to the argument that people need to carefully consider their options at the start of next month and take their time making their choices – sensible advice when you consider that these could be life changing decisions.
“We welcome the proposal to “assess whether the protections for savers that have been put in place so far are adequate” as in order for the new Pension Freedoms to have the positive impact that the Government and Industry want, strong safeguards need to be in place. Independent financial advisers are at the heart of many people’s retirement planning process and can help them to avoid ‘making poor decisions or being exposed to potential fraud and scams’ – a key concern of the committee.
“Looking to the longer term future, the committee makes some excellent suggestions around the pension’s dashboard and financial literacy which we believe will help to significantly improve the UKs retirement savings culture and allow people to enjoy the full benefit of these reforms.”
|
