Complying with HMRC’s reporting standards for new withdrawal option UFPLS is the biggest technical challenge of implementing the pension freedoms, say providers.
Despite lower than expected demand for cash withdrawals, 40 per cent of 15 providers surveyed by Dunstan Thomas said uncrystallised funds pension lump sums rules were their biggest administration issue.
The survey also found more than one in ten (13 per cent) of providers say they are due to launch guidance – or other advisory services – before the end of the year.
Yet 93 per cent say there is not enough clarity between simplified, focused and full advice.
In addition, 80 per cent say the pension reforms will be good for business over the long-term, but just 7 per cent think the freedoms will lead to a boost in their D2C platforms.
Dunstan Thomas managing director Natanje Holt says: “It is clear that Pension Freedoms has created a huge administrative workload for providers which they will be still working through deep into the summer.
“However, there is already clearly pent-up demand for product and service innovation and the long-term prospects for the retirement market have improved significantly following the abolition of the pensions death tax and an end to the annuity-dominated at-retirement market.”