“The 6 April is just over a month away, at which point we will experience the greatest transformation of the UK pensions system since the introduction of the Old Age Pension in 1906. Since the changes were announced in the 2014 Budget, the pensions industry has been urgently transforming its systems and processes to accommodate the new flexibilities allowable under the new pension regime. With the actual legislation only available within the last few months, however, the pension industry is under significant pressure to be able to deliver the required changes.
“There is no question of an individual not being able to exercise their freedom on the 6 April. There won’t be a capacity crunch with individuals left without their retirement savings. Such talk is unhelpful. The reality is though, that whilst individuals will be able to access their retirement savings from the 6th April, they may be better waiting for a short while, until the market rationalises itself.
“There is perhaps an issue with individuals, particularly in trust-based schemes, hearing about the new options and assuming the flexibilities automatically apply to them in their current scheme, when in fact they may need to transfer to another type of pension scheme first. Individuals need to be informed of what the pension schemes will, and will not, offer them.
“Over the next year or so, new and more innovative products will become available and individuals will have far greater choices of the way in which they can exercise their new found freedoms. Such developments will also reduce costs and well as provide additional benefits.
“In the first few months, the groups who are likely to be interested in accessing their benefits are those who have delayed their retirement, those coming up for retirement and those over age 55 looking at how the new pension freedoms will allow them to access their pension savings whilst still working. This latter group are the ones who should particularly look at delaying their decisions until the market has settled and new products have been made available.”
|
