Posted on by Nigel Ross-Scott

Press Release

PIMFA comments on The Work and Pensions Select Committee Report on Pension Freedoms

5th April 2018

Following the publication of the Work and Pensions Select Committee’s response to its inquiry into Pension Freedoms, Simon Harrington, PIMFA’s Senior Public Policy Adviser, said:

‘It’s right that the Work and Pensions Select Committee should look at the current retirement market and see room for improvement. We agree with the Committee that a properly functioning pension freedoms market consists of a virtuous circle of better-informed customers switching providers and demanding cost-effective products. However we believe that the recommendations put in place by the Committee are a retrograde step to achieving that.’

‘We are not philosophically opposed to the introduction of default pathways, but we need to be realistic about the fact that their introduction will more than likely see individuals choosing them as a path of least resistance. We have two concerns surrounding this; namely that drawdown will be marketed as a default choice in a manner similar to annuities pre freedoms and that individuals will remain with their provider and not engage on the open market to best assess their options. In our view doing so will increase rather than reduce the potential for long term consumer detriment.’

‘However, the Committee is right to call for NEST to be provided with the powers to provide an income for its members. We believe that it is time to stop looking at NEST as a public intervention and recognise it as a pension scheme. To this end, we cannot and should not assume that every issue prevalent across the pension policy landscape should be fixed by NEST’.

‘We believe that a larger issue with Freedom and Choice is a lack of innovation within the market. To this end, we are disappointed to see calls for the introduction of a charge cap – a blunt instrument which we believe will harm rather than spur on innovation. This is, in our view, a wider reflection of the fact that value in pensions is being too closely associated with cost rather than outcomes.

To read the full report, click here

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Notes for Editors

About PIMFA – the Personal Investment Management & Financial Advice Association

  • PIMFA is the UK’s leading trade association for firms that provide investment management and financial advice to everyone from individuals and families to charities, pension funds, trusts and companies.
  • PIMFA represents both full and associate member firms.
    Full members provide a range of financial solutions including financial advice, portfolio management, as well as investment and execution services. They assist everyone from individuals and families, to charities and pension funds, all the way to trusts and companies.
    Associate members provide professional services to the PIMFA community.
  • PIMFA leads the debate on policy and regulatory recommendations to ensure that the UK remains a global centre of excellence in the wealth management, investment advice and financial planning arena.  Our mission is to create an optimal operating environment so that its member firms can focus on delivering the best service to clients, providing responsible stewardship for their long-term savings and investments.
  • PIMFA was created in June 2017 as the outcome of the merger between the Association of Professional Financial Advisers (APFA) and Wealth Management Association (WMA) – read more.

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