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Tales from the frontline on pension freedoms


It has been noticeably quiet for us on the pension front since the reforms were introduced. It appears consumers have heeded the various warnings to avoid rushing to make decisions. We expect to advise a large number of clients on pension freedoms over the next three to five years but hopefully these will be on a careful, considered basis. I would be nervous about engaging with anyone who came knocking on our door at this point desperate to empty their pension pot at any cost.

I suspect the bulk of enquiries being reported by providers are in respect of relatively low value pots, where there is little advantage in converting it into an income for life and the money is better spent on meaningful activities such as home improvements.

One enquiry I did receive was from a gentleman keen to sell his modest annuity income for cash, unaware this proposal was not in force until next April. However, he was not too disappointed when I explained the cash value he was likely to receive for his annuity was very unlikely to be anywhere near as much as he originally paid for it, once life expectancy, risk and profit was taken into consideration.

Martin Bamford, managing director, Informed Choice

While we have received a few queries in relation to the pension freedoms, there has not been the avalanche we were told to expect. However, we have had a couple of notable experiences.


For example, one client, who is already retired but with a significant amount remaining in uncrystallised pensions, received a call from a scammer. The scammer pointed her to a website which looked incredibly sophisticated and spoke to her about some of the “new investment opportunities” the reforms allowed her to take advantage of.

She called us as soon as she’d put the phone down and made sure she was clear in relation to how the reforms impact her. It concerns me how many people will be scammed in this way. 

Another is a conversation I had with a 30-year-old who hadn’t saved into a pension before but felt the new freedoms gave him more confidence to do so. I like the idea of pension freedoms. Providing people with greater choice is a positive move in the right direction. However, we need to ensure customers are protected by guiding them in the most appropriate way.

Chris Daems, director, Cervello Financial Planning


The new era of pensions has begun more quietly than we expected. Apart, that is, from the teacher who burst into tears when our adviser said he would not help her encash her pension. Not only was she far too young (early 50s) so the current transfer value was low but she did not have (or refused to disclose) the reasons she needed cash.

We have dealt with a couple of enquiries by would-be encashers of DC schemes simply by quoting fees high enough to deter them. Rubber-stamping such requests is a licence to be killed. On the other hand, we were surprised by the new-found enthusiasm for pensions of a high-earning legal partner who had been putting a few hundred pounds a month into her plan. She announced she had borrowed £100,000 to contribute (using carry forward) in order to eliminate her higher rate tax liability for 2014-15.

We have also met several more modestly paid individuals who have started to raid capital (including Isas) to increase pension contributions. The combination of tax relief and flexible withdrawal has converted people from apathy to something approaching enthusiasm. As for our wealthier clients, many are telling us they expect never to withdraw anything from their pension funds since they recognise the substantial inheritance benefits they obtain under the new rules

Chris Gilchrist, director, FiveWays Financial Planning



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  1. Chris Gilchrist may find himself killed if he doesn’t treat transfer of DC schemes with the respect that they deserve, instead of brushing aside clients by charging extortionate fees for the process. His inability to evaluate the situation and take into consideration the restrictive practice of DC schemes in regards to the inheritance of pension potsin regards to members of the immediate family. Advisers may find complaints arising from siblings when the DC scheme has returned less capital than the transfer value offered by the DC scheme, thus creating a shortfall of capital to the siblings.

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