Pension freedoms receive Royal Assent; the industry responds
The Bill also set out a number of provisions for Pension Wise, the free official pension reform advice service.
Numerous industry figures and commentators have responded to the news. Andrew Pennie of Intelligent Pensions noted that the Act was “an important stepping stone” to introduction on 6 April, which provided “the necessary ingredient of the guidance guarantee.”
While stating his belief that Pension Wise would offer “valuable guidance to thousands”, helping new retirees “understand their options”, Pennie acknowledged that the service “will not be working perfectly from day one” – but forecasted it would become “a key component of the advice process” in time.
However, he also voiced concerns that guidance and support is being focused on those “at the point of retirement”, and believes the provision “needs to be widened.”
“People need more help in the years approaching retirement to select the correct pre-retirement investment strategy to meet their needs and objectives,” Pennie concluded. “Standardised approaches in pre-retirement years are no longer suitable; everybody’s retirement will be different A more personalised approach is needed if we are to see significant improvements in retirement outcomes.”
Joanne Segars, chief executive of the National Association of Pension Funds, welcomed the Act, and stated that the reforms “have the potential to bring real benefits to savers.”
However, Segars also noted that there is “still uncertainty amongst the public about what they should do to make the most of the opportunities.” She believes that the government “should waste no time in providing the missing pieces of the puzzle”, as there were only “23 working days to go.”
“It is vital government ensures all communications to savers are realistic, so they can make solid plans for retirement and avoid disappointment,” Segars concluded.
Claire Trott of Talbot and Muir said it was a “shame we have had to wait this long for the legislation to be enacted.” However, Trott also welcomed the “thorough review” the Bill had received in Parliament, as “legislation rushed through” often “makes it difficult for providers and advisers to deal with the changes”, and “uncertainty makes it difficult to accurately and confidently give answers.”
She went on to forecast that advisers “will be getting a lot of questions from their clients on the changes”.