Pensions freedoms inquiry

JoeCrystal

MoneySavingExpert Official Insert:

Thank you JoeCrystal for posting this! Parliament planned to post this but you beat them to it. If you don't mind we'd like to add its questions in here to help feed into the debate. Parliament may be posting on your thread to help answer questions.


What are you doing with your pension pot and are you taking proportionate advice and guidance?

The Work & Pensions Committee holding an inquiry into whether and how far the pension freedom and choice reforms are achieving their objectives and whether policy changes are required.

This is an opportunity for you to share your thoughts and experiences to inform the inquiry.

The Committee would like to find out:

• What are people doing with their pension pots and are those decisions consistent with their objectives? Is there adequate monitoring of the decisions being made?
• Are people taking proportionate advice and guidance and if not, why not? Are people adjusting behaviour in response to advice and guidance?
• To what extent will pensions dashboards enable consumers to make more informed decisions about their retirement savings? What are the remaining obstacles to their creation and success and how should those obstacles be overcome?
• Is Pension Wise working? If not, how should it be reformed? Are there any implications for the proposed creation of a new single public financial guidance body?
• Are there persistent gaps in the advice and guidance market and what might fill them? Is automated advice and guidance filling gaps as expected?
• Is there evidence of product market competition resulting in cheaper, clearer or a wider products for consumers? Are people switching from their pension provider in accessing their pots? Is an adequate annuity market being sustained?
• Are the Government and Financial Conduct Authority taking adequate steps to prevent scamming and mis-selling?
• Are the freedom and choice reforms part of a coherent retirement saving strategy? To what extent is it complimentary to or undermined by other policies?

Rt Hon Frank Field MP, Chair of the Committee, said:
"Pension freedom and choice liberated savers to choose what they wanted to do with their own money. This was welcome, but as with any radical reform it important to monitor its practical effects closely to ensure it is working as envisaged. In this case it is vital that adequate support ensures people are equipped to ensure they don’t make decisions they subsequently regret.
I am particularly concerned that savers are more vulnerable than ever to unscrupulous scam artists. This policy must not become the freedom to liberate people of their savings."

If you don’t want to share your experiences on the forum you can contribute through the Committee’s website (http://www.parliament.uk/business/committees/committees-a-z/commons-select/work-and-pensions-committee/inquiries/parliament-2017/pension-freedoms-17-19/).


Back to your original post...

Just seen that the Work and Pensions Committee launching a new inquiry into whether and how far the pension freedom and choice reforms are achieving their objectives and whether policy changes are required. Should be interesting to see the evidences on that! Hopefully they will cover DB transfers out as well.

Link to the Pensions freedoms inquiry page

LHW99

All interesting points, particularly "Are people taking proportionate advice and guidance and if not, why not? Are people adjusting behaviour in response to advice and guidance?" IMO

My feeling is that Why not? certainly includes the cost factor.
And adjusting behaviour in response to advice & guidance? Not if the number of posters here determined to transfer DB pensions even against financial advice is any guide.

dunstonh

Are people adjusting behaviour in response to advice and guidance?" IMO

I'm not sure how they can measure that one. My experience is that the majority of people end up doing something different to what they planned to do at the start. i.e. the advice is something different to what they thought. However, that is not recorded in any of the FCA stats. So, its not a measurable outcome.

Linton

LHW99 wrote: »

All interesting points, particularly "Are people taking proportionate advice and guidance and if not, why not? Are people adjusting behaviour in response to advice and guidance?" IMO

My feeling is that Why not? certainly includes the cost factor.
And adjusting behaviour in response to advice & guidance? Not if the number of posters here determined to transfer DB pensions even against financial advice is any guide.

In general the people who post about pensions on MSE arent a representative sample of the general population. And any who simply take advice not to transfer probably wouldnt bother to report the fact. So who knows?

LHW99

In general the people who post about pensions on MSE arent a representative sample of the general population. And any who simply take advice not to transfer probably wouldnt bother to report the fact. So who knows?

Undoubtedly true, and I can understand that getting independent advice certainly can make people realise that they may need to change their original approach in order to realise their goals, as Dunstonh says.

However, it does seem that there is an increase in people wanting to transfer DB's no matter what as shown by
https://www.professionalpensions.com/professional-pensions/news/3013889/advisers-say-insistent-clients-are-leading-to-rise-in-db-transfer
Which does seem to imply that there are a good number of people who, even when advised that its not a good idea, persist in their desire to do it.

bigadaj

Linton wrote: »

In general the people who post about pensions on MSE arent a representative sample of the general population. And any who simply take advice not to transfer probably wouldnt bother to report the fact. So who knows?

The people posting here aren't a representative sample, you are correct, they are on average far more informed and knowledgeable than the wider population.

This would even go for the newbie posters having a huge cetv dangled in front of them, they at least have the common sense and appetite for knowledge to ask questions on a forum where they mouth get some unbiased opinion.

The majority of the population would simply be desperately grasping any opportunity to get their mits on this huge wealth that they haven't seen before. That's where all the pension scams, unregulated investment, dodgy forestry etc etc come into it.

aphill24

bigadaj wrote: »

The people posting here aren't a representative sample, you are correct, they are on average far more informed and knowledgeable than the wider population.

This would even go for the newbie posters having a huge cetv dangled in front of them, they at least have the common sense and appetite for knowledge to ask questions on a forum where they mouth get some unbiased opinion.

The majority of the population would simply be desperately grasping any opportunity to get their mits on this huge wealth that they haven't seen before. That's where all the pension scams, unregulated investment, dodgy forestry etc etc come into it.

When i recently posted about workmates going down the CETV route and stating it was not something I would consider I was derided by a couple of posters on here, so not sure all members of this forum are as educated as they believe.
Have there been any posts on people who have gone down the CETV route and opted out of a DB pension? If so what has happened to the pot since in terms of value/fees paid or ferrari's bought ?:rotfl:
Perhaps I should post the question as a topic?

bigadaj

aphill24 wrote: »

When i recently posted about workmates going down the CETV route and stating it was not something I would consider I was derided by a couple of posters on here, so not sure all members of this forum are as educated as they believe.
Have there been any posts on people who have gone down the CETV route and opted out of a DB pension? If so what has happened to the pot since in terms of value/fees paid or ferrari's bought ?:rotfl:
Perhaps I should post the question as a topic?

Would be worth starting a thread in that subject.

Currently cetv values are grossly inflated so we're actually in an unusual period where transferring out may make sense for some if not many people, the issue is that a six figure sum just looks like a lottery win to many.

You aren't being very objective by saying you'd never consider a transfer, whether that is worthwhile or not just depends on the benefits accrued and the sums offered, pragmatism over dogma as we often say.

The transfer out can make sense if people either successfully diy or employ an adviser and are prayed to take in risk, you'd expect the outcome to be better with a transfer out as you've received the money base on a near no risk scenario and so adding risk should increase returns.

So as everything the answer is it depends.

Former_MSE_Andrea

Thank you for posting this JoeCrystal. Parliament was planning to start a thread on the same topic so we've hijacked yours for the same purpose. Hope you don't mind