Industry is responding to pension changes: Osborne

Industry is responding to pension changes: Osborne

Chancellor of the Exchequer George Osborne has said the pensions industry is responding to his reforms, ahead of 6 April, and has welcomed LV=’s launch of pension tools.

He said: “People who have worked hard and saved all their lives should have the freedom to decide what to do with their pension in retirement.

“We are giving people real choice over their money and enabling them to make important decisions for their future.

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“Our freedoms offer a real opportunity for consumers to think hard about how they want to manage their retirement and I am pleased that the pensions industry is responding to that need.”

However, Mr Osborne added that customers would have to think hard about what they are planning to do once the reforms come into effect.

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.

One of the providers to launch a product is LV=, which has created a new online tool to help advisers put together a blend of products for their clients.

LV= is working with HM Treasury on the creation of a pension passport to help savers keep track of how much money is in each of their pots.

Mr Osborne said: “It is great that LV= is developing new tools to help customers consider their options.”

New research by LV= showed nine in 10 over-55s are aware of the pension reforms but over half are still undecided on what to do.

John Perks, managing director of LV= retirement solutions, said: “We believe these changes present a great opportunity to change the retirement landscape for the better, giving customers more choice and control over how they manage their retirement income, and we believe the Government has taken a bold and positive step here.

“There is also an important role for regulated advice to ensure those approaching retirement make the most of the savings they have spent a lifetime building.

“Prior to the 2014 Budget we were already seeing advisers blending solutions in order to achieve a level of income flexibility and a guaranteed element for retirees.

Retirement has evolved and we think that our proposition, which builds on the breadth of our product suite, will help meet the income needs of today’s retirees.”