Pension changes ‘will need huge effort in short time’

Responding to the Treasury’s 56-page consultation on the Budget’s pensions reform proposals, Freedom and Choice in Pensions, the chief executive of the National Association of Pension Funds said the government had to co-ordinate how to implement the reforms.

Ms Segars said: “The implementation of these reforms, including the charge cap, must be co-ordinated to allow schemes to make all the necessary changes with minimum disruption to members.”

The government will publish a summary of responses later this year. Proposals include the guidance guarantee and scrapping compulsory annuitisation, as well as allowing people access to their pension pot on retirement.

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Simon Smallcombe, managing director at Axa Life Invest, said: “We are asking the government to recognise guaranteed drawdown as a mainstream category so savers can gain access to a product that delivers the flexibility of drawdown with the security of an annuity.

“These reforms do not change the fact people value certainty above all else. Future retirees will still need an income they are guaranteed to not outlive.”

The Association of British Insurers said it was paramount to develop an income framework that would meet the vastly different requirements of current and future workforces. It said tax rules should strike the right balance of creating a simple and flexible framework while also providing the right protections to customers.

Dr Sandy Scott, chief executive of the Chartered Insurance Institute, said the CII supported the reforms, particularly the proposal to guarantee to consumers impartial, personalised and free guidance on their retirement options, adding: “Regardless of who delivers this guidance, they will all need to be subject to a set of standards governing their service.”

Chris Hannant, director general of the Association of Professional Financial Advisers, said: “It is important there is flexibility on the delivery of guidance. Guidance also needs to be impartial, and it is vital there is clarification on how this will be defined.”

Adviser View

Shane Hyland, director of Cardiff-based HRW Financial Consultants, said: “Here’s an idea, a retirement Isa – no tax relief in, but no tax out. People have such a negative view on pensions and in Wales people tend to have smaller pots compared with the rest of the country, and are less likely to review them. There has to be another layer, another carrot to make people want to save for another 10 years.”