Legal and General has called on the Government and FCA to weaken the new advice requirements for people accessing their pension pots to help ease customer frustration.
In March the regulator announced a radical overhaul of pension transfer rules, including requiring people to see a pension transfer specialist when transferring out of schemes with “safeguarded benefits”.
In addition, people in defined contribution pensions with embedded guaranteed annuity rates are now required to take advice before transferring out of schemes.
But L&G pensions strategy director Adrian Boulding says rules around GARs are one of the main blockages frustrating customers trying to use the new pension freedoms.
He says: “It’s a Government requirement that if you have more than £30,000 in a policy with a guaranteed annuity rate that you have to take financial advice – that’s the blockage.
“The Government should review that requirement and replace it with a different rule so that the ceding pension scheme is instead required to inform customers that they have a GAR and suggest they might like to take financial advice.
“At the moment we have a situation where the law says you must take advice, the individual doesn’t want to and is certain they will not follow the advice anyway, and advisers are not keen to pick up this business, and I don’t blame them.”
Earlier today, the Treasury announced a consultation on addressing “excessive” exit fees and delays in transferring between providers.