Wise up to freedoms

At the time we said that the reforms would go down in history as comparable to the founding of state pensions and even the national health service. It was that transformative.

However, the predictable unintended consequences have reared their ugly heads and, again predictably, are obsessing people in a way that they should not.

The problem is simple: given the right to access their entire pension pots, many people understandably want to exercise the right to dip into these savings, but barriers are in the way.

Along with the freedoms the Treasury has introduced something called Pension Wise, which is anything but, offering a kind of advice lite, for those with small pots and who cannot afford, or do not want to, pay for advice.

Then there is the sting in the tail: those who still want to access their money must seek full advice from a regulated financial adviser.

And the financial adviser, having been stung by the pensions mis-selling and the endowment scandals, which had a detrimental impact on their professional indemnity insurance, are reluctant to offer any such advice unless they are assured that they will not be held responsible if the pension holder squanders his or her money.

Government is reluctant to give any such undertaking since it would rightly be perceived, by adviser and pension pot owner, as effectively underwriting by the state.

Further, there is fear on the part of government that if people in their advancing years were to blow their pension pots there is the moral hazard of them depending on the state to survive.

From a distance, the solution seems simple: get rid of the dysfunctional Pension Wise, a variant of the equally unnecessary Mas, introduce a system of financial aid, funded by part of the £20bn in dormant bank funds and, if necessary, introduce primary legislation to prevent those who blow their funds from taking legal action against their advisers or providers.