The ABI has today published a letter sent jointly to The Chancellor of the Exchequer George Osborne and to Martin Wheatley, the Chief Executive of the FCA. The letter sets out proposals on policy reforms to further develop the pension freedoms and in particular to address some of the barriers obstructing investors from accessing their pensions.

Tom McPhail, Head of Pensions Research: “This is a welcome initiative by the insurance industry to find a way through the regulatory and legal challenges which are causing problems for some of their policyholders. Take-up of Pension Wise needs to be improved and its remit could possibly be extended. As far as possible, the emphasis should be on helping individuals to make good, informed decisions for themselves and to avoid having to pay for advice unless absolutely necessary.”

“There is much work still to be done in improving the quality of retirement communications. For example the insurance industry should send retiring investors a short simple pension statement (the Pensions Passport) in place of the turgid and lengthy retirement packs so beloved of insurance companies. We also need to press ahead with developing minimum standards for retirement income providers when dealing with non-advised customers, to ensure that everyone can have confidence in the service they are receiving.” The letter also poses some challenges to the government, for example calling for better monitoring of the pension freedoms. In January 2015 Hargreaves Lansdown wrote to the Treasury expressing concern that no new data tracking systems had been put in place to monitor the pension freedoms. In their response to us, the Treasury stated:

“Tax data will provide information on the decisions people make about how to access their pension savings in retirement. Data on the sales of particular products has been and will continue to be made available not only by trade bodies such as the Association of British Insurers, but also by individual firms. The Treasury will continue to engage with industry to monitor the operation of the reforms and ensure that they are working as intended.” Source HMT letter to Hargreaves Lansdown February 2015 ref TO2015/02116.Tom McPhail: “The ABI is right to be challenging this issue. These reforms are hugely popular but they are also fundamentally reshaping the pensions landscape; it looks irresponsible not to track in close detail the effects they are having.”