We are approaching four years since the introduction of the pension freedom reforms, but clarity seems no nearer.
The reforms obviously prompted a huge number of people to ditch annuities and go into drawdown.
But the greater number of people in drawdown has been followed by a large amount of hand-wringing about whether they should be in drawdown, what sort of drawdown they are in and whether they will die in penury.
Ultimately, the issue advisers, pension providers and the Financial Conduct Authority are having to grapple with is the very nuanced one of how much personal freedom anyone should be given to harm themselves.
It is easy to yell into the void that people should simply take advice, and if they do not then what happens is their responsibility.Those who are familiar with their John Stuart Mill will know the classical liberal position is that my freedom to swing my fist only stops where your nose begins.
But this will only work in practice if we are all-knowing entities: for example, it seems perfectly reasonable to make people aware of the harms of smoking.
When it comes to pensions this matter becomes even more fraught, simply because most people do not have the foggiest how their pension works and, in all likelihood, they do not want to know either.
There are many problems here. Chief among them the fact that there are still few products that achieve what savers want: an element of flexibility, but with some element of a guarantee.
But ultimately, the advice profession needs a greater proliferation of services that can help more people. It is easy to yell into the void that people should simply take advice, and if they do not then what happens is their responsibility.
But advisers, pension providers and the regulators need to do their part as well to make sure there is something out there everyone can afford.
Some of that might be robo-pensions advice and some might be face-to-face advice.
Until that happens, savers are likely to end up getting financially punched in the nose.
damian.fantato@ft.com
