Gov’t isn’t ready for pension reforms: ABI
The government is not yet ready for the pension reforms and not enough has been done to ensure a seamless start on 6 April, largely due to the tight timeline, the director general of the Association of British Insurers said.
Speaking yesterday (25 February) at the ABI conference, Huw Evans said that while the industry supports the pension reforms, it is impossible to say six weeks before freedom day that the government is ready, adding “that is a statement of fact, not an attribution of blame”.
He stated: “As of now Pension Wise has no phone number, so there’s nowhere for pension providers to direct people to if they don’t have internet access.
“We still don’t know exactly how the guidance sessions will work, how they will be structured and how they will be recorded, so that providers and advisers know what customers have discussed and what has been covered.”
While there have been many surveys carried out on expected numbers that will use the guidance, there have been wild disparities between them, largely due to a lack of understanding amongst consumers. According to Retirement Portal, less than 25 per cent plan on using the guidance service.
A previous survey, commissioned by Partnership and carried out by Defaqto, found only 5 per cent of consumers would use the guidance guarantee, while in October, research from the Chartered Insurance Institute revealed that 92 per cent might make use of the service.
Mr Evans said: “We do not have any modeling shared on expected volumes to use the service and estimated waiting times that can be shared with customers. We don’t know the final tax rules on annuity payments to beneficiaries and we don’t know how lump sum payments by trust-based schemes will be regulated.”
He added that the Financial Conduct Authority still has not issued its rules on how providers will need to interact with customers in the ‘second line of defence’, especially for those who refuse to take up guidance. However, the FCA told FTAdviser that this should be published by the end of this month.
Mr Evans added: “In short, the government has simply not been able to deliver enough at this stage to ensure the reforms have a flying start when they go live on April 6. Critical pieces in the jigsaw are still missing and they will not be in place in time to deliver a seamless start on April 6.
“Now, this should not surprise us given the fixed timeline and the formidable to do list that faced the Treasury and its partners when it completed the consultation last summer.
“I should certainly say its no reflection on the efforts put in by the Treasury, the Citizens Advice Bureau, the Pensions Advisory Service, the Money Advice Service and many others who have worked tirelessly to set it up.”
ruth.gillbe@ft.com
