Recently-appointed City minister Harriet Baldwin has admitted requirements for customers to seek to advice to access their pensions are unclear.
Under rules introduced alongside the pension freedoms in April, savers with safeguarded benefits worth over £30,000 must take regulated advice before accessing their pot. Earlier this month, Money Marketing reported confusion among providers about when the advice requirement applies.
Speaking at the launch of Scottish Widows’ retirement report yesterday, Baldwin said: “I’m concerned that in some circumstances the regulatory requirement to seek advice isn’t clear, and I have asked the FCA to investigate this further.
“I want it to be clear exactly what is expected of firms, because that will make the process smoother for you, as well as your customers.”
The comments come after Baldwin wrote to the regulator criticising the industry for blocking savers from using the new flexibilities.
In the letter, Baldwin said: “I am concerned that some providers may not be allowing consumers to access their savings even if they have met the regulatory requirements to seek advice and I welcome your agreement to investigate this further.
“In the meantime, I trust that you will make clear to firms that putting unnecessary and unfair barriers in the way of consumers seeking to legitimately transfer their pension savings is not acceptable. Where this is found to be the case you will no doubt wish to consider whether this could be regarded as a breach of their responsibility to treat customers fairly.”
The City minister also paid tribute to the way in which many insurers have responded to the introduction of the pension freedoms.
She said: “Many, many providers have stepped up to the challenge, offering customers a wide range of options so that they can take advantage of these new flexibilities.
“I do know, though, that these are major reforms, and they are major reforms for the industry to adjust to in a short space of time.
“Many firms have had very significant systems challenges to overcome but it’s an exciting opportunity for the industry to innovate and to meet their customers new needs and expectations.”