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Aegon refuses pension freedoms without advice

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Aegon is blocking customers from accessing the pension freedoms unless they take financial advice.

The Telegraph reports that those who do not wish to take advice are being given three options: cash in their entire pension pot, buy an annuity or transfer to another provider.

Aegon expects to offer the freedoms to those who do not take advice from April 2016.

An Aegon spokesman says: “Pensions can be complex and require customers to make decisions about investments, how much income to take and how long their savings might need to last.

“We are still working through our offer and will launch when we are confident it will meet customer needs.”

Pensions minister Ros Altmann says: “People who really do need to take their money should not be denied the chance unfairly. The real problem is the difficulty and large cost they face if they transfer to another provider.

“We are looking at this in our consultation and investigations and we want members of the public who are experiencing difficulties in this regard to let us know what is happening.”

Friends Life is unable to offer the pension freedoms after failing to adapt its systems.

The Government has mandated that savers with safeguarded benefits worth more than £30,000 get regulated advice before taking their pot as cash.

But in June, Money Marketing revealed providers are adopting different stances on when advice is required beyond that, with only some making advice a requirement for entering income drawdown.

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Comments

There are 11 comments at the moment, we would love to hear your opinion too.

  1. Pensions minister Ros Altmann says: “People who really do need to take their money should not be denied the chance unfairly. The real problem is the difficulty and large cost they face if they transfer to another provider.

    Heaven protect us from people like this.

  2. paolo standerwick 7th September 2015 at 9:28 am

    in out in out in out and shake it all about.

    Aegon blow with the wind they fancy. A client of mine was recently offered annuity options only despite Aegon having a drawdown product in it’s product range. If I were a cynic I would think that’s a convenient way to hang onto clients money!

  3. Also, I am shocked to discover that, when asking a pharmacist for a heroin substitute, they will refuse to serve you unless you have first
    a) seen a doctor
    b) been advised that the drug is necessary and then
    c) obtained a prescription.

    Why can’t people just get what they want without all this red tape?

  4. Ivor, people will take their cash, or reinvest, and then complain to the FOS that they are ‘just simple

  5. So Aegon will not do a partial and drawdown will mean doing a transfer first.

    No quite as dramatic as the headline sounds.

    One question, if the freedoms go pear shaped and the customer loses money, where will Ros be then.

  6. I say good for Aegon !

    This is a business decision pure and simple, if they don’t have anyone qualified to offer advice then its the right decision, there is guidance (which we all have to pay for) in abundance, so why pay again to offer this in house.

    I don’t think (as Ros Altman may suggest) that Aegon are being unfair if they (Aegon) make there consumers aware that they don’t offer advice, but you need it, this is just being responsible ?

    I haven’t read the Telegraph report, but I would wager its very lop sided

  7. The lead article on the home page warns about the “worrying success” of non-advised drawdown.

    This article directly below it bemoans Aegon “refusing pension freedoms”.

    There are legitimate reasons to criticise pension providers, but they are really between a rock and a hard place with the new pension regime. Any attempt to manage the risk to their business is seen as them being obstructive and not in the spirit of the reforms, whereas if they do go with the flow they are accused of taking advantage of their customers and being reckless.

  8. It seems somewhat extraordinary that, from the various options available, AEGON has decided to allow without advice the single most potentially dangerous one of all, namely full encashment.

  9. In my view it is the least risky.

    Even a customer must understand if they encash the policy they will have a lump of money but no pension.

  10. Aegon is right. We are now all in the risk management business.

  11. Stewart Tomlinson 8th September 2015 at 11:36 am

    Aegon told me they were launching a direct to consumer draw-down product in Q4 of this year; they have clearly changed their mind.

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