The deputy director general of the Association of British Insurers said any guidance offered “could easily see customers drawing down their pension assets and investing them more widely”.
And he suggested this would justify the ABI’s call for a “more equitable” split of the annuity guidance bill, which PwC analysis has predicted could be as high as £120m a year.
Mr Evans said: “Given the guidance process could easily see customers drawing down their pension assets and investing them more widely, it would certainly be more equitable if all parts of the financial services sector contributed to the cost of the guidance service and the more liberalised market from which they will all benefit.”
Mr Evan’s comments came as the Treasury clarified its position on the “free, impartial face-to-face advice” announced by chancellor George Osborne in his Budget speech last Wednesday, and revealed it would come down to pension providers to offer the guidance.
The government has already announced a £20bn “development fund” but this is only intended to pay for two years’ set-up costs.
A spokesman for HM Treasury said: “Pension providers and schemes will be required, by April 2015, to offer all individuals retiring with a defined contribution pension pot free and impartial face-to-face guidance on their retirement choices.”
He added: “The government’s radical reforms to pensions will increase the choices hard-working people have in retirement and allow them to spend their hard-earned savings as they choose. They have been warmly welcomed by experts and consumer groups.”
The government has announced it plans to consult with the FCA, Pensions Regulator, Pensions Advisory Service, Money Advice Service and consumer groups on how to deliver the guidance, which the Treasury spokesman said would result in “a set of clear and robust standards that the guidance will have to meet”.
Philip Smith, a director in PwC’s defined contribution pensions team, said: “Insurance companies could be facing a double hit from the government’s proposals as they shoulder the duty of delivering this guidance at the same time they are contemplating how to fill the likely contraction of their annuities business.”
Chris Hannant, chief executive of the Association of Professional Advisers, said: “Many customers received poor outcomes at retirement. The Budget announcements were a reaction to this. It’s inequitable that everybody else in financial services should be called upon to pay for a proposed remedy. Talk around the cost of a new system is far too premature – it’s like dividing-up a restaurant bill before the menus have been opened.”