New FCA rules on retirement choices show that ‘reckless caution not lamborghinis’ is big issue with pension freedoms

Following publication today of the FCA’s conclusions from its Retirement Outcomes Review, Steve Webb, Director of Policy at Royal London said:

‘The big outstanding challenge around pension freedoms is not people with large pots blowing the lot on a sports car, but is about more inexperienced investors with smaller pots leaving them invested in cash for long periods of time or withdrawing them altogether.   These FCA rules are a sensible response to the risk of savers sleepwalking into seeing their hard-earned savings eroded by sitting in low-return cash investments.  But there is still a problem where people cash out the whole pot and transfer it into a cash ISA or current account.  It is clear that reckless caution, not Lamborghinis, is the big outstanding challenge with pension freedoms’.