Time is running out for urgent reforms to Pensions Schemes Bill
27th January 2015
As the Pension Schemes Bill enters one of its final Parliamentary stages, Royal London calls for urgent action to reform the financial advice market
- With just 62 days left until the reforms come into force, Government is running out of time to introduce reforms that will protect consumers from detriment
- Much greater access to advice is critical for consumers to make informed decisions about pension provision
As the Pension Schemes Bill enters Report Stage in the House of Lords today, Royal London is calling for urgent reform to the financial advice market before the legislation comes into force in April 2015. With just 62 days remaining, the Government’s reforms risk massive consumer detriment unless steps are taken to secure much greater access to financial advice.
Phil Loney, CEO of Royal London, said:
‘As the Pension Schemes Bill nears the end of its Parliamentary process, the Government is running out of time to implement critical reforms to strengthen its proposals. Pensions Minister Steve Webb and the Financial Conduct Authority have previously indicated their support for introducing a more affordable advice model, but as the clock ticks down toward implementation, we have yet to see any real action. Yesterday’s announcement by FCA that they will give customers “Additional Protection” by requiring pension providers to give some clear and direct warnings about the consequences of their actions is welcome but it doesn’t do anything to increase the supply of affordable advice.
“We are calling on Peers to take steps to strengthen the Bill and clearly point out the importance of impartial advice. Otherwise significant numbers of consumers will end up making complex decisions without access to the financial advice they need to make the right choices with their pensions. The risk of consumer detriment is huge. The Government has just 62 days left. We urge them to act now, make these critical changes and protect consumers.”
For further information please contact:
Gareth Evans, Head of Corporate Affairs 0207 506 6715/ 07919 170069 firstname.lastname@example.org
Note to Editors:
- Royal London are clear that we need to see a clear need for a much more economic model of advised sales to cater for those whose needs are complicated enough to require an advised discussion, but more modest than those of many who already use IFAs. As a mutual, Royal London is committed to ensuring that its customers buy the appropriate products.
- There is a danger that without action to reform the advice service two separate groups begin to form:
- those who can already afford to pay for advice, are willing to do so, and who now have access to a more professional and transparent service. They are mostly individuals earning in excess of £50,000 and are extremely well-placed to capitalise from the Government’s pension reforms; and
- a second group who do not have the resources of the first. They need advice but are not an economic prospect for advisers given the amount they have available to invest.
About Royal London:
Royal London is the largest mutual life, pensions and investment company in the UK with Group funds under management of £78.4 billion. Group businesses serve around 5.3 million customers and employ 2,823 people (figures quoted are as at 30 September 2014).
The Group is currently moving all of it’s UK life, pension and investment businesses under a new version of the Royal London brand. The Group's independent wrap platform will remain branded Ascentric.