The pension freedoms announced by George Osborne in March 2014 were unexpected, but widely welcomed as a way of making pensions more accessible.
But it is the latest in a long line of political tweaking to retirement benefits in the past 30 years, spanning the end of compulsory workplace pensions in 1988 to the introduction of pension scheme Nest in 2012.
Claire Trott, head of technical support at Talbot and Muir, points out that some of the biggest issues have been around the changes to the lifetime allowance and the increasing number of protection regimes in place to allow people to protect benefits that have already been accrued.
She says: “Enough already! That’s just the tip of the iceberg. It really does put people off [pensions] because of the changes. It would be nice if there were some consistency and long-term planning. You don’t know where you stand.”
That said, she notes that the last batch of changes, although “massive”, are quite sensible. “The extent of the reforms is probably too far but the reasoning behind them, with more flexibility, is good.”
But she points out the big changes have meant little things are not being tidied up. “[There’s] no complete overview; its all individual policy, which is political meddling,” she explains.
Elaine Turtle, director at DP Pensions, agrees the pension freedoms changes are a good thing, but is concerned with the speed at which decisions and policies have been implemented.
She points out ‘pension simplification’ was announced in 2002, but the government and HMRC had meetings with the whole industry to discuss the changes before the introduction of A-Day in 2006.
“This has just been so quick and with the election in May, could it change again? The rush makes people think they have to do it now, so there is a question about whether we have a lot of people rush in and then regret what they’re going to do.”
David Trenner, technical director at Intelligent Pensions, says: “You can criticise what happened in 2002-2004, which was consultation after consultation after consultation and no action, but at least at that point people were given a chance to comment.”
A further consequence of the swift implementation of these reforms is the potential tax consequences thrown up by the new legislation which people may not understand.
Martin Tilley, director of technical services at Dentons Pension Management, says: “In terms of consultation with the industry looking at the pros and cons and getting it right first time, it is too short a timescale, too short a run-in period, and the introduction of the guidance guarantee has been rushed through far too quickly.
“The problem with the guidance guarantee is that it’s specific to the pension product it refers to. You can understand the options within the product but not how it fits into a person’s holistic financial planning, with possible inheritance tax implications, a possible mortgage and so on… That’s where a qualified adviser would come in.”