Platform functionality still cannot accommodate the full range of pension freedoms, almost three years after the reforms were introduced, a provider has said.
Alistair Wilson, head of retail platform strategy at Zurich, said "computer says no" was still too often the response from platforms when it comes to income drawdown.
Pension freedoms, implemented in April 2015, allowed savers to access their pots in any way they like from age 55, giving them access to a range of retirement options, including income drawdown and full or partial encashment.
Mr Wilson said platforms were well-placed to facilitate these options but some were yet to make the full range of freedoms available "in the areas consumers should rightly expect".
“‘Computer says no’ is still too often the response from most platforms when it comes to drawing income," he said.
“And it isn’t complex retirement functionality that lets them down. It is the simple stuff, such as allowing people to select the date they want their income paid or doing away with paperwork when they want to access their cash."
He added: "Consumers rightly expect choice and flexibility without unnecessary restrictions."
Consultancy firm the Lang Cat recently found just 53 per cent of advisers use a platform specifically for decumulation, that is to enable clients to manage the withdrawal of their retirement savings.
The Lang Cat’s founder Mark Polson said that what made this particularly disappointing was the fact some of the most popular platforms did not offer “the most basic features” for decumulation.
A large amount of assets has been moved onto platforms in the years since the pension freedom reforms.
According to data released by the Lang Cat in November, growth of new platform business stood at about 50 per cent in the third quarter of the year, compared with the same period last year.
Total assets under administration on platforms amounted to £493.7bn, with £377.9bn of that being retail advised assets, the firm said.
Demand for income drawdown has also surged since the freedoms.
Data from the regulator obtained by advice firm Salisbury House Wealth showed the amount savers withdrew from their pension pots through income drawdown almost tripled in the past five years, from £5.6bn in 2012 to 2013 to £15.3bn now.
Mr Wilson said it was important platforms caught up and became more sophisticated at helping advisers and customers set up and manage income withdrawals.
"At the moment, there is still too much focus on accumulation, over income," he said.
"The platform market as a whole needs to get quicker and slicker at giving consumers their money back."
Mr Wilson was also said moving money into drawdown without first seeking guidance or advice was fraught with risk.
It left people to make decisions for themselves without fully understanding the alternative strategies available, the need to manage investment risk, the tax consequences and what to do at the time when their health starts to deteriorate, he said.
The FCA launched a thematic review into the sale of drawdown products to non-advised consumers in response to drawdown sales trends earlier this year.
The work and pensions select committee meanwhile, is also holding an inquiry into the pension freedoms.
Mr Wilson said he expected the topic of drawdown to be "one of the industry's major talking points in 2018".
He said in addition to encouraging more people to seek advice the government's guidance service Pensions Wise should consider to offer a drawdown MOT for non-advised consumers ahead of age 75.
"After age 75, passing on any money invested in drawdown becomes less tax efficient.
"This would be a good mid-way point in a person's retirement to reassess their capacity for loss and continued understanding of drawdown, as well as review alternatives for the provision of their income," he said.
carmen.reichman@ft.com
