The key point is Mr Geale’s reference to “people understanding what they are getting into”. This means proper guidance and, where appropriate, full advice.
In this context it was perhaps slightly disappointing that earlier this month one of the largest insurers, Scottish Widows, reported within a month of the reforms just a third of people were seeking Pension Wise support before calling to crack open their retirement nest egg.
It offered no figures on how many did so when it was signposted and recommended. I suspect and hope it was higher and remain convinced that savers, especially those who have internalised the concept of freedoms before getting to retirement, will take up the offer of free guidance.
It is the advice piece with which we should concern ourselves. Aside from the issues of cost that may preclude mainstream savers seeing an adviser, the unfolding debate about so-called ‘insistent’ clients is also key.
For all the good, sensible reasons someone with a small pot may seek to access their fund, there are as many and perhaps even more cases where this would be a terrible decision. At least with adviser support they might avoid the worst tax consequences, or make some longer-term provision.
The FCA attempted to reassure advisers again this week when it published a factsheet alongside its policy statement on tougher pension transfer advice rules, but the truth is advisers remain unconvinced, as our follow-up story showed.
That’s probably as much to do with a siege mentality that has set in across the sector as anything. Whatever the reason, it’s important that this too evolves to reflect the mindset of the new world.
ashley.wassall@ft.com
