Association of British Insurers director general Huw Evans has told MPs that the concept of equating a pension to a bank account should be banished.
Giving oral evidence at yesterday’s Work and Pensions select committee hearing, Evans said: “If I could rub a lamp ‘Aladdin-style’ and have a few wishes certainly one of them would be to stop people referring to pensions as a ‘bank account’. It is the most irresponsible thing anyone can say.
“You cannot attract a tax liability when you withdraw money from a bank account or set up a direct debit. You can if you access pension liabilities.
“There is a piece [of work to be done] around customer expectations and we have to use the right language.”
The ABI told MPs at the launch of the Pensions All-Party Parliamentary Group in June that it was co-ordinating a steering group focused on language around retirement saving, with director of long term savings policy Yvonne Braun promising to report back by the end of the year.
At the same hearing, Apfa director general Chris Hannant said the regulator and the Treasury must intervene on advisers’ liabilities if they wish to generate mass-market offerings.
Hannant admitted that Apfa members currently represent a “Saville Row” service, while parts of the market need an “M&S style offering”.
He said: “One of the fundamental cost drivers for financial firms is the liability that is attached for getting it wrong. That is the number one concern for the larger firms who could offer a broader-based service.
“That comes down to Financial Services Compensation Scheme levies, the Financial Ombudsman Service, and lack of a long-stop.”