Has the rollout of pension freedoms been an almighty disaster? It depends on who you ask, with a gulf emerging between the two camps.
In the red corner, the Government and the consumer press are keen to berate providers and the wider financial services industry for not allowing savers to access their pension pot in the way they want.
In the blue corner are the insurers and the adviser community, much maligned for holding back the apparent tide of would-be retirees from a lifetime of instant wealth and happiness. Perhaps this characterisation is crude, but you get the idea.
The tough talk against those standing in the way of pension freedoms has been stepped up in a big way. The Government, keen to be standing on the side of consumers, has pulled no punches with its language over the last week. Pensions minister Ros Altmann has talked of her “disappointment” of firms that are “lagging behind” in offering the full range of pension options. Work and Pensions Secretary Iain Duncan Smith has also waded in, talking of providers “dragging their feet” and naming and shaming those that are seen to be “putting barriers up” to pensions access.
Not to be outdone, Labour peers have also joined the fray on the separate but related issue of drawdown charges, which have been dubbed “ridiculously high” and akin to the £20bn payment protection insurance misselling scandal. Lord McFall, the previous chair of the Treasury select committee, has gone so far as to claim savers are being ripped off “daily”.
What is conveniently not being mentioned amongst all this rousing rhetoric is providers are not compelled to offer the pension freedoms, nor do they have to invest significant sums in order to deliver the Government’s vision of pensions freedom and choice for all.
I agree that it is imperative for savers to be given the correct information when it comes to their options at retirement. This includes whether or not they need to take advice, and the providers that are getting this wrong need to cascade the right information to their staff, and fast.
But what is not acceptable is for the value of advice to be sullied as part of all this. Requirements to take advice have been put in place to protect consumers, not rip them off. Advisers also act as a welcome voice of reason against the clarion calls to treat your pension like your bank account, with no thought to the tax bill you may incur.
We would not want to be in a situation in 10 years’ time where the shrieking headlines are along the lines of “Why have savers been allowed to rot in retirement poverty?”
Natalie Holt is editor of Money Marketing