Baroness calls on Ministers to engage in pensions advice crisis debate

Wednesday, 09 May 2012

Following the publication of ILC-UK’s report “The Retail Distribution Review and Small Pension Pots” in March this year, the leading think tank dedicated to addressing issues of longevity, ageing and population change, has today announced that it will host a Retirement Income Summit at the Actuarial Profession, on 20^th June 2012. 

The Summit is supported by the UK’s largest insurer Aviva and pensions specialist Partnership.

Ministers from HM Treasury and the DWP alongside the FSA have been invited to participate in the Summit, which will provide a public forum to discuss the concerns raised in ILC-UK’s report that the impending regulatory environment for financial advice (RDR) may result in an ‘advice gap’ where the poorest and least well-off pensioners will fail to receive critical financial advice. ILC-UK believes this may result in consumer detriment, for those who arguably are in most need of support.

Baroness Greengross, Chief Executive of ILC-UK said:

“The end of compulsory annuitisation, the introduction of the RDR, the growth in the number of small pension pots and the introduction of auto enrolment are all coming together at the same time. Put together, the pensions policy landscape faces fundamental change. For the sake of both today's and tomorrow's pensioners, ILC-UK urge the Treasury, DWP and the FSA to join us at the Retirement Income Summit 20^th June to discuss these issues.

Steve Groves, Chief Executive of Partnership said:

The key changes brought by the RDR are to be welcomed. A transparent, professional advice market is in everyone’s interest. However they risk creating an “advice apartheid” unless there is greater clarity on what is information rather than advice and the processes to access financial products are simplified.”

Trevor Matthews, Chief Executive, Aviva UK & Ireland added:

“By bringing together Government, regulators and the pension industry we want to explore ways to help consumers get the best possible income in retirement. One of the unintended consequences of the Retail Distribution Review may be to limit access to advice at retirement, particularly for consumers with moderate savings who may not wish to pay a fee for full independent advice. By continuing to improve access to the Open Market Option and help retirees to shop around we can make a very real difference to consumers’ income in retirement.”