By Jamie Clark, Business Development Manager
The pensions revolution is almost upon us. As with any revolution, there will be winners and losers. The winners in this case could presumably be the politicians that orchestrated pensions freedom and choice just before the general election. As for the losers, there may be many thousands of people who simply do not understand just how detrimental to their financial health the incorrect decision (or indecision) might be. Putting in place protection for these people has been a rather rushed afterthought. Evidence of this includes the FCA using their “emergency powers” to quickly establish processes designed to help protect consumers from their own decisions.
The real problem here is that pensions continue to be used as a political football. Party leaders continue to promise to fiddle around the edges of the pension rules with their focus firmly on the silent grey majority. This creates confusion in the industry and has the potential to destabilise the market — just like what happened to annuity sales after the budget announcement.
For a good few years, commentators have talked about the need to remove major decisions and policies that affect long-term pension savings from the short-termism political arena. It’s pleasing to see that the Work and Pensions Committee has called for government to set up an independent pensions commission to look at the impact of automatic enrolment and the new freedoms and suggest any changes that might be required. If long-term savers are to be protected from sometimes sudden seismic shifts in policy, maybe this needs to go further and be a permanent part of the pensions landscape going forward.