Policymakers must suspend any further changes to pensions as the industry prepares for the imminent pensions flexibilities, to avoid initial meltdown in providers’ systems.
Tim Bateman, partner at auditing, accounting, tax and advisory services company Mazars, said: “The freedom for customers to choose what to do with their money when they retire is a fantastic development. But it would be nice if we could stop now and have a moratorium (on tinkering with the system).”
Mr Bateman, who deals with businesses including life insurance companies and mutuals, claimed that not all providers would be ready for 6 April, predicting initial “meltdown” for some systems because of surging demand.
He said: “This situation is going to be similar to what happened with pensioner bonds (when the website crashed because of demand), and the systems are not going to cope.”
Figures from the pensions industry and related sectors have demanded an end to tinkering as businesses prepare for the 6 April reforms.
Since the 2014 Budget, advisers and providers have witnessed developments including the abolition of a 55 per cent tax on defined contribution pension savings on the death of the saver, the introduction of pensioner bonds, and proposals to create a secondary annuity market.
However, Mr Bateman said the industry would eventually adapt to the changes, adding: “It is going to take advisers a while to work with the range (of product) that is out there.”
In February pensions minister Steve Webb told an industry event that to avoid a rush on 6 April it may be best to tell clients: “Stay in bed. There is no rush. Come back in the autumn and sort it out.”
|Developments in the pensions industry since the March 2014 Budget|
|Abolition of the 55 per cent tax on defined contribution pension savings upon death|
|The introduction of pensioner bonds|
|The creation of the Pension Wise service|
|The proposal to create a secondary annuity market|
Alan Higham, retirement director for Fidelity Worldwide Investment, and founder of Buckinghamshire-based Retirement Angels, has been asking politicians to stop pushing through changes at such a speed since April last year. He said: “We would like to call for a pause within parliament from issuing more significant pension changes while we digest what is on our plate now.”