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McPhail: Pension freedoms was 'reckless'

McPhail: Pension freedoms was 'reckless'

Tom McPhail is one of the most recognised names in financial services, and one of the people most closely associated with his employer, Hargreaves Lansdown, next to the founders, of course.

So it was understandable the industry reacted with shock when he announced he would be leaving – not only leaving Hargreaves, but financial services altogether – going to join an electric bike company, Pure Electric, where he will do public affairs, something his role as head of policy has very much become.

In truth, it was not such a leap: the owner of Pure, Adam Norris, is a former director at Hargreaves Lansdown; a former professional cyclist, he also recruited Mr McPhail to Hargreaves.

So why the move? “I enjoy cycling and climbing, like a lot of people I’m mindful of the environmental issues. I saw an electric scooter and I was blown away by this. I loved being able to arrive at work not all sweaty,” he says. 

One of Mr McPhail’s main skills has been to combine his PR skills, developing his relationship with journalists, with his lobbying skills.

He recently obtained a diploma in public affairs, but really got the lobbying bug when he was asked to join the campaign for the Open Market Option – the push to make it easier for people to shop around for an annuity.

He says: “It introduced me to the world of changing the rules – discovering that you can make a difference, you can change the rules if you find the right buttons to press.

“That has been really enjoyable for me, and the relationship between politicians and media has been interesting. We see politicians – Boris Johnson and Michael Gove – that have been in politics and the media, and the relationship between the two is very powerful.”

For many operating in the media, he has also been a useful commentator about government policy, especially in pensions, offering insights to policy interventions with varying degrees of controversy.

Perhaps the most controversial topic has been the initiative to release people from the necessity of buying an annuity when they come to retire, known to everyone in financial services as pension freedoms.

While this was radical in its approach, and entirely unexpected, many have argued that the rush to push it through – it was given 13 months for launch – and the absence of any consultation, is likely to have caused many of the problems that have since arisen, such as vulnerable people losing valuable pensions to scam artists.

Mr McPhail is in agreement with this. He says: “I think pension freedoms was one of the boldest and most reckless policy decisions ever made – with no consultation or discussion, [George Osborne] just lobbed a grenade. 

“I still can’t say it was a bad thing because the annuity market was in a bad place.