The FCA is already in the process of exploring pension freedom reforms and have raised concerns about non-advised drawdown so there is an opportunity for joined-up thinking.
When pension freedoms were first introduced they were spearheaded by the then Chancellor, George Osborne. The legislation was introduced quite rapidly for such a fundamental reform to the savings system, and caught a lot of people off-guard. That is why, two years after the reforms were introduced, policymakers are still asking questions.
Consumers can’t afford for long-term savings policy to be in a constant state of flux and will be concerned that this review may signal further changes. Trust in pensions is already a major issue as recent figures from the Office of National Statistics have 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.
Constantly changing policies is hurting the savings culture and if people think more changes are coming down the pipeline, they are likely to lose even more faith. A consultative approach to policymaking could help make that culture more healthy and sustainable. Ideally we need a cross-party group to convene to set out a long term vision for pension policy, rather than have the party in government introduce reforms which are later queried by other MPs.