The National Association of Pension Funds (NAPF) has commented on yesterday’s (Tuesday) debate in the House of Lords on pensions drawdown charges.
Joanne Segars, Chief Executive, NAPF, said:
“The NAPF shares the Lords’ concerns about savers’ freedom to access their pension savings readily and affordably under the new pension reforms. We raised these concerns last year when it became clear that the timetable to which the Government wished to implement the reforms was simply unrealistic.
“At the heart of this problem lies a tension between providing savers with products quickly and allowing time for a robust market to develop that’s fair to savers. The Government did not complete the legislation for these reforms until just 20 working days before the reforms were due to begin and unexpected additional regulation was announced as late as early this year. With so little time to prepare it was always clear that, despite everyone’s very best efforts, there would be a significant gap between the Government’s ambition for these reforms on day one and the practical reality.
“Savers who wish to access their pension funds flexibly today may find they can’t secure the products or advice they need at a price they want to pay – and that’s understandably incredibly frustrating for them. All workplace pension schemes still allow eligible members to transfer the full value of their pot to a drawdown provider or use it to buy an annuity – as was the case under the old rules – and nearly half1 of schemes we asked have already made changes under the new rules to allow members to withdraw their full pot as cash. The problem remains for savers that there are limited products available to them, so until the market has developed we’d encourage savers to take their time and not rush. And we continue to urge the Government to work with us and other parts of the industry to create a market where savers can gain good value, easy access to their pension savings.”
Notes to editors:
The NAPF is the voice of workplace pensions in the UK. We speak for over 1,300 pension schemes that provide pensions for over 17 million people and have more than £900 billion of assets. We also have 400 members from businesses supporting the pensions sector.
We aim to help everyone get more out of their retirement savings. To do this we spread best practice among our members, challenge regulation where it adds more cost than benefit and promote policies that add value for savers.
1 The NAPF commissioned Critical to conduct research among the NAPF’s members. Fieldwork was undertaken April – May 2015. 138 members with defined contribution schemes responded, with over 4m members.
Lucy Grubb, Head of Media and PR, NAPF, 020 7601 1726 or 07713 073023, [email protected]
Eleanor Bennett, PR Manager, NAPF, 020 7601 1718 or 07825 171 446, [email protected]