The National Association of Pensions Funds has revealed that it is getting lots of queries from scheme members asking about the details of the pension changes which come in April next year.
That is a good thing. It shows that Joe Public are aware that something big is going to happen to pensions next year, even if they are not fully aware of what the changes entail. It also speaks to the urgent need for private pensions education in the build up to the historic changes, something that has not been mentioned very much by providers or advisers.
The reality is that with people having access to their pensions pots of anything from £30,000 to hundreds of thousands, there will be an urgent need for financial education, not only about savings and investments, but about the very architecture of financial services.
For the first time in modern history, ordinary investors will have to know about the different vehicles, how they are designed and how they fit in to the financial plans of ordinary pensioners.
This is the moment that financial advisers have been waiting for, the time to add tremendous value to their clients’ financial needs.
But it is also a job for the government, providers, community and affinity groups, which goes far beyond the restrictions of the guidance provided for in the new legislation.
Mass financial education is going to be as central to the changes as new products, tougher regulatory rules and protection against fraudsters.
Already we have seen examples of experienced financial advisers battling to come to terms with the proposed changes; and if professionals are at a loss as to what they really mean then it is certain that ordinary pensioners will be also. The new landscape is also a challenge for good employers to provide urgent and much-needed financial education to their at retirement staff, and, eventually, the entire workforce.
When the gate opens on the financial revolution in April, it will be a force never before seen in British retail finance.
