Webb confident innovation is on the way

Webb confident innovation is on the way

Pensions minister Steve Webb has expressed confidence that there will be innovation in the retirement market after 6 April.

Mr Webb, who is also Lib Dem MP for Thornbury & Yate, said he could understand why some providers had not come out with a raft of new products yet since they would be focusing their efforts on providing the freedoms from next month.

He said: “I can understand that the focus for providers is on getting their systems set up in time.

Article continues after advert

“One thing I think we may see is some sort of later life default. You can take some income, save the rest and, unless you actively choose not to, it will be turned into an income for life.”

Mr Webb added that there would also be potential for innovations in the care market.

He said: “I would argue that you should integrate pensions and care products a bit more.”

Mr Webb has been encouraging innovation in the industry throughout the reform process and has previously said some elements of the legislation have been left vague to allow this to happen.

Yvonne Braun, head of savings, retirement and social care at the Association of British Insurers, echoed Mr Webb’s belief that innovation would be on the way eventually.

She said: “Once 6 April is out of the way we will see more innovation and we will see more about how things are communicated to people.

“It is not just about products but how to give people the ability to make choices, how to support them.

“The focus for our members right now will have to be on how to implement the reforms, getting everything ready and ensuring it is done.”

Earlier this month a survey carried out by Financial Adviser showed that most pension providers would be offering the freedoms but with existing products rather than new ones.

Of the 22 providers contacted only seven said they would be launching new products, though not necessarily in time for 6 April.

Adviser view

Mike Pendergast, of Cheshire-based Zen Financial Services, said: “Certainly there hasn’t been much news in terms of new products, and some companies will just amend their terms and conditions.

“I think companies will see how it goes and see what the demand is.”