Royal London has called for a new independent commission to set the direction of policy on pensions, retirement income and later life financial provision, amid concerns that short-term government thinking could see some of the radical pensions freedom unwound.
Echoing the National Association of Pension Funds’ proposal for an Independent Retirement Savings Commission, the insurer said the committee should consider the full range of issues facing the growing elderly population of the UK.
Phil Loney, Royal London Group’s chief executive, said: “At present, policy around retirement planning is becoming too short-term and ‘political’, there is nothing to stop a future government from reversing some of the recent policy decisions on which we are building.
“This kind of uncertainty can only act as a disincentive for people to save for the future; that is why we are calling for a commission to look at all aspects of later-life financial provision, and to provide a basis for a lasting political consensus.”
Mr Loney also stated that the government’s guidance guarantee was not enough to deal with the complexities of tax, means testing and inheritance planning, which require regulated financial advice to get the best from the reforms.
However, he added that for most people this advice is unavailable or unaffordable. “There needs to be a fresh look at how we can make financial advice more affordable and available for the wider general public.
“Access to financial advice should not be a privilege that is only affordable for the well off.”
Mr Loney also took aim at the unsolved problem of inadequate care funding, arguing that regulators are alert to the issue, but have so far taken little action.
“The commission we are calling for could look at these issues, perhaps recommending that whenever someone makes a will they must not only appoint executors but also appoint someone with Power of Attorney over their affairs in the case of mental incapacity.
“The only way we can resolve issues such as advice and long-term care is to consider them away from day to day politics. These issues are long term and many of the required solutions may be considered politically unpopular.”
peter.walker@ft.com
