Greater pension clarity needed: Scottish Friendly

Greater pension clarity needed: Scottish Friendly

Clear guidelines on pensions are needed urgently to overcome the ambiguity over what is, and is not allowed, Neil Lovatt has warned.

The product director for Scottish Friendly warned that pensions could be under-used by people who need them, because of the ambiguity over what is permissible under the new access rules.

He said the problem lay in the grey areas between the government and the regulator, claiming that many pensioners attempting to withdraw their cash lump sums are hitting stumbling blocks when it comes to actually accessing their money, often due to advisers and providers being cautious due to fear of mis-selling.

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Mr Lovatt said: “While the Government’s pension freedom proposals were generally applauded, many providers and advisers, conscious of their regulatory and moral duty of care for their customers, have been cautious in dealing with people wanting to cash in their pensions.

“The passive-aggressive disagreement between the government and the regulator needs to be resolved. We have a government set on ensuring pension freedoms are available to all and that customers know how to spend their own money.

“On the other, we have a regulator who will not give clarity to providers and advisers on how to deal with clients who want to take their money, when doing so may not be in their best interests.”