After recent criticisms by consumer groups and even the pensions minister herself, LV= has become one of the first major pension providers to do a U-turn on their plans not to offer people the full pension freedoms as promised by the Government.
Under the new legislation brought in by the Government this year, people at the age of 55 with company or personal pensions are to be given full access to their pension pots. This means they are free to do what they like with the money. Previously, their only option was to buy an annuity guaranteeing them an income for life.
However, many of the major pension providers have been slow to offer people these freedoms. Just this month, Friends Life who had originally planned to offer people complete access through what is known as 'flexi-access drawdown' reversed its plans citing the 'complex nature' of the situation. This resulted in people being denied the opportunity to use their pension pot like a bank account as promised, and were only left with the option of transferring to another provider, cashing in their entire pension or buying an annuity.
This drew criticism from the Government's new pensions minister Dr Ros Altmann. She said "I find it disappointing that even the larger pension companies are not allowing their customers to take advantage of the new freedoms that the government has introduced for them.
The [pensions] industry has had over a year to prepare for the changes – and it is encouraging that some firms have risen to the challenge. But others seem to be failing to move with the times and are still acting as if nothing has changed. "
The news that LV= has lifted its restrictions on what people can do with their money is good news for those who have their pensions with them. In a statement, LV= Retirement Solutions spokesperson John Perks said: "We originally had minimum pot restrictions on our flexi-access drawdown solution reflecting how we thought customers with small pots would act. However, we have removed these to ensure all of our customers are able to take advantage of the pension freedoms."