Unfortunately, there is nothing in the Pensions Green Paper which is likely to make the slightest difference to the public's ingrained distrust of and lack of confidence in private pensions.
Whether or not Joe Public still believes that the state will look after him if he makes no provision of his own is another matter. If he does, he is a fool.
Given that one of the most ingrained terrors of civilised society is penury in old age, the thought that people are going to reach retirement having done nothing at all for themselves is pretty scary. So what is the Government doing about it?
Aifa's paper in response to the Green Paper says: “The Government wants shopping around for the right annuity to be made easier.” This overlooks the fact that people do not want to buy an annuity at all. For people who do not want to buy one, there is no right annuity.
What people want is a pot of money they can use in any reasonable manner of their choosing to provide an income for life. This means being allowed to spend the capital at a regulated rate and/or leaving what has not been spent to the next generation. Until the Government wakes up to this fact, anything else it does is just tinkering with the machine.
Just how bluntly does the message have to be spelt out? The public do not like annuities and will not commit money to a product which forces them to buy one. Is Andrew Smith stupid or ignorant or both?
Julian Stevens Partner,WDS Independent Financial Advisers,Kingswood, Bristol