Labour has accused the Government of making pension policy “on the hoof” and avoiding the challenge of fixing the annuity market.
During his Budget speech in March, Chancellor George Osborne announced that from April 2015 savers would be able to take their whole pension pot as cash when they reach 55.
Plans to allow Dutch-style collective defined contribution schemes were also unveiled in the Queen’s speech last week.
Speaking in a debate in Parliament on the Queen’s Speech yesterday, Labour’s work and pensions spokesperson in the Lords Baroness Sherlock said: “I regret the Government have failed to meet the challenge Labour laid down during the debates on the Pensions Bill to sort out the dysfunctional annuities market once and for all.
“All they have done is to sidestep the issue by letting people take their money out, but that does not solve the problems so we will return to that issue as the Bill goes through this House.”
The Financial Conduct Authority is currently carrying out a 12-month review of the annuities market. In April, FCA director of policy risk and research Chris Woolard told the Treasury select committee the regulator was now “focusing more of the study towards the future”.
Sherlock added: “Many of us started debating the annuities market while having no idea the Government were about to unveil measures which would totally change the context.
“I think it [the Budget] was done on the hoof. However, I struggle to conclude that a strategic approach to reforming pensions needs three Bills just on private pensions in one year, but perhaps I lack imagination. I look forward to hearing more about them.”