Rules restricting the sharing of personal data may block early intervention plans from guidance providers, experts are warning.
Speaking at a recent eValue roundtable in London, The Pensions Advisory Service chief executive Michelle Cracknell (pictured) said the organisation would not wait until next April, when the new pensions freedoms come in, to contact savers planning to take advantage of the new rules.
She said: “We would like to pick up the people who have already notified their providers or schemes that they are planning to take their benefits in April 2015. A number of people are planning to take the money out of their scheme and they are not aware of the tax implications of doing so.”
But Legal & General pensions strategy director Adrian Boulding questions whether providers will be able to pass on details of confidential customer discussions to other organisations.
“If customers say they want their money, we cannot stand in their way and say ‘we are going to pass your details over to TPAS and have them ring you’,” he says. “What the customer says to us in confidence is not something we can share with TPAS.
“Interestingly, this is different from an advised client relationship. As part of those relationships we have information sharing agreements – we can alert the IFA and it can decide it wants to step in. We just don’t have that sort of relationship in place with TPAS.”
Standard Life head of corporate strategy and propositions Jamie Jenkins says “tipping off TPAS isn’t the right way of looking at it”, adding that the Data Protection Act prevents firms from sharing customer data without their permission.
But he thinks Cracknell is right to say the industry needs to be preparing customers approaching retirement now who might be considering taking some of their fund as cash next year.
Jenkins says the data protection issue will need to be solved as discussions around introducing a pensions passport of members’ pension data gather pace.
He adds: “One of the things we need to consider with that is how do we ensure that we encompass the rights of the individual under the Data Protection Act? An initial question might be asking members if they are willing for us to share their data with a third party.”
However, Aviva head of pensions policy John Lawson says the pensions passport “takes us not a jot forward from where we are at the moment”.
“If firms were really interested in the customers, they would be pushing for an aggregation model that will allow customers to see all their finances in one place. The pensions passport doesn’t do that – it just takes details from one provider.”