“Today's data from the financial regulator shows that consumers simply cannot afford not to take advice at the point of retirement. Therefore, the FCA is right to look at increasing consumer protections where people are either unable to unwilling to take advice.
“Over half of customers are taking their retirement savings and investing in something else, like an Isa, cash, buy-to-let or fixed-term deposit. This can have disastrous long-term consequences.
“Taking a lump sum in a single tax year is likely to result in paying more income tax than withdrawing money gradually. And savers are giving up future tax-free investment growth in a pension in exchange for comparatively low-growth assets like cash, or illiquid property.
“Figures from the Office of National Statistics last week revealed that almost half of people (49%) consider property the best means of making money for retirement. Only 20% of respondents said workplace pensions were the best way to maximise returns.
“The report confirms that pensions are suffering an image problem. But modern pension products offer competitive charges, a range of investment options, liquid investments that can be easily sold to produce income, and come with the protection of the Financial Services Compensation Scheme.
“Trust in pensions is a major issue and the regulator and the savings industry must do more to understand why some members of the public are fearful of pensions. There is a strong case for government to establish a cross-party independent commission to set pension policy. The report confirms that constantly changing policies is hurting the savings culture and a consultative approach to policymaking could help make that culture more healthy and sustainable.”