Emma Ann Hughes 

Little less FCA conversation a little more action please

Emma Ann Hughes

Emma Ann Hughes

It is three years since then chancellor George Osborne threw caution to the wind and delivered pension freedoms.

The bold move came after years of the City regulator faffing around with the annuity market.

The watchdog spent loads of your money considering what would it take to get more people to shop around for a better retirement income deal than the one they were offered by their pension provider.

In just a single sentence, former chancellor Mr Osborne made all that work, time and effort at the regulator a total waste by unveiling pension freedoms and exposed the very different approaches to life taken by MPs and the regulator’s staff.

Since April 2015, thanks to Mr Osborne, nobody has had to buy an annuity if they are in a defined contribution pot and instead – if their scheme allows it - they can pass on their pension or even take a cash lump sum and buy a Lamborghini.

You do get the sense if it was left to the regulator, pension freedoms would never have happened.

With their remit to protect consumers, it is difficult to envisage that the Financial Conduct Authority (FCA) would have ever thrown open Pandora’s Pension Box like Mr Osborne did.

Indeed Rory Percival, former technical specialist at the FCA, who now runs his own compliance consultancy, said "rumour has it that the pension freedom legislation was hatched in the back of a black cab". 

He said: "The FCA had next to no notice of the announcement. It is an example of the very different policy-making approaches of the government and the FCA. 

"The FCA has a very strict policy-making process involving devising draft rules, undertaking a full cost benefit analysis and going through a consultation phase. 

"It seems that government can devise new laws without this kind of process - obviously there is the Parliamentary process that hopefully would mitigate against the worst of poor legislation."

Clearly Mr Percival thinks the FCA’s approach is far better than Mr Osborne decision to pretty much draw up economic policy on the back of a fag packet.

But is it right that it is taking the watchdog ages to deal with the negative fallout of pension freedoms?

People are being scammed out of their pots, forsaking defined benefit guarantees and potentially pulling cash out of their pots too quickly and risking being left impoverished in retirement.

While it is good to talk and debate at times sometimes what is needed is a quick assessment, swift action and not endless, costly consultation.