The government must review the pension freedoms to prevent savers from being ripped off and hit with charges that eat up their retirement savings, according to Frances O’Grady, the general secretary of the TUC.
Responding to comments made by pensions minister Baroness Altmann, who cited problems with the freedoms, the TUC general secretary criticised the government for introducing the reforms.
“The government was warned that rushing in the so-called ‘pension freedoms’ risked causing chaos in which savers would be the losers. There should be a thorough review to examine the impact of George Osborne’s ill-thought-out experiment with Britain’s pension pots,” she said.
The government immediately ruled this out, with Baroness Altmann stating it would not intervene and force pension providers to deliver on the promised freedoms.
“If things are not working properly, we will take action,” she said. “But let’s give these reforms a chance; let us see how they work; the idea is right.”
Ms O’Grady’s comments came after Baroness Altmann penned an opinion piece in a national newspaper with economic secretary to the Treasury Harriett Baldwin, stating that savers should be able to use their pots as they wished, regardless of which provider they used.
“There is no excuse for firms to claim their rules mean you cannot access your money,” the piece read.
Ms O’Grady said savers must have access to good value, high-quality retirement income options, “and not simply be left alone to fend for themselves in a free-for-all”.
Earlier this month, Baroness Altmann said she found it “disappointing” that even the large providers were not allowing their customers to take advantage of the freedoms.
She said: “Some firms have risen to the challenge, but others seem to be failing to move with the times and still act as if nothing has changed.”
The FCA said it was monitoring how firms were implementing the changes and the effects they were having on consumers.
An FCA spokesman said: “The majority of people have taken advantage of the new rules without any problem, but we are talking to those firms where issues have arisen as the reforms bed in. It is in everyone’s interest to ensure consumers can use the new options available to them with confidence.”
Matthew Walne, director of East Midlands-based Santorini Financial Planning, said: “The FCA’s reforms were a bolt out of the blue for the providers, as it was for us. They did not have much time to deal with it. But it is people’s money and they should be allowed to do with it as they wish.
“There does not need to be a review, as it is still early days.”