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Greengross: Govt reforms do not address small pot advice problem

Baroness Sally Greengross has called on Lord Turner, Mark Hoban and Steve Webb to attend a public debate on the impact the RDR will have on people with small pension pots.

In March this year, 16 cross-party politicians and industry leaders signed a joint letter, drafted by ILC-UK chief executive Greengross (pictured), calling on the Government and the FSA to address the risk a post-RDR advice gap could lead to consumer detriment for those with small pots.

The Government and the FSA subsequently dismissed the concerns, claiming reforms to the open market option, plans to consolidate small pension pots, the establishment of the Money Advice Service and the introduction of adviser charging will address the issue.

Greengross has again written to Turner, Hoban and Webb warning the short-term problem of a lack of annuity advice will not be addressed by these reforms.

She says: “Although these initiatives are extremely welcome we are concerned that they may only bear fruition in the medium to long term.

“We continue to believe that the combination of the end of compulsory annuitisation, the introduction of the RDR, the growth in the number of small pension pots and the introduction of auto-enrolment will require further policy action in the short term, and certainly before January 1, 2013.

“ILC-UK will host a retirement income summit on June 20 and we would be very grateful if you would be willing to attend at least part of the debate.”

The letter has also been signed by Partnership chief executive Steve Groves and Aviva executive director of developed markets Trevor Matthews.

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