Chancellor George Osborne has dismissed fears of misselling following the implementation of new pension freedoms in two weeks’ time.
From 6 April defined contribution scheme members aged 55 or over will be able to withdraw their entire pension pot as cash, although withdrawals will be taxed as income.
The Treasury has also published a consultation on creating a secondary annuity market from April 2016. Labour leader Ed Miliband responded by warning of “rip-off merchants” awaiting pensioners.
Addressing the Treasury select committee this afternoon, Osborne insisted the systems created by the Government to support the reforms, as well as oversight from the FCA, will be sufficient to protect savers.
He said: “People can now book their appointments for having that [guidance] conversation about what they want to do with their pension and they can start to book telephone session which will be available from tomorrow.
“The consumer protection is there. The guidance is there. And if people want to they can go and get regulated advice as well.
“We have a good package to make sure that people can get what they need.”
Asked about how protection will be extended to existing annuitants, the Chancellor said: “I would be very surprised if the result of the consultation is that we shouldn’t have the same guidance. Indeed in many cases, because this is a big decision, people will also want to get advice.”
Osborne denied reforms to allow people to cash-in their annuities would likely be used primarily by “desperate” individuals in dire financial straits, heightening misselling risks.
“There are a whole range of circumstances and I’m not trying to anticipate what they are,” he said.