Former pensions minister Sir Steve Webb has this week come out in defence of his landmark pension reforms. The move comes after a report from the Financial Conduct Authority sought to address some of the issues pensions freedoms have caused. He was speaking at the launch of a new report by the International Longevity Centre which showed that people who took financial advice about their finances and pensions were on average £40,000 better off.
Much of the reporting of the new report on pension freedoms has arguably tended to focus on some of the more negative outcomes since the launch. The Financial Times reported:
"When George Osborne, then the UK chancellor of the exchequer, decided that from 2015, those aged over 55 could take much more of their pension in cash, there was a chorus of warnings from experts.
"The move was likely, they said, to lead to inexperienced consumers being hoodwinked into paying excessive fees as they cashed in pension rights. It was likely to reduce their provision for retirement, as pensioners either bought inappropriate savings products or failed to invest properly at all. And it was likely to replicate the same problems as earlier troubles in the annuities market, with pension companies milking profits from uninformed customers rather than producing the keenly priced products pensioners needed. It can be little comfort that, after the changes were driven through with little consultation, each of those predictions is coming true."
Sir Steve Webb, however, has hit out at the negative reporting of the FCA's report and preferred to highlight the many positives that the introduction of pension freedoms have brung.
"Some of the reporting of the FCA's report was wildly inaccurate. You would think pension freedoms had gone to hell in a handcart. Pension freedoms have really worked for people who have had people help them and in the FCA report is shows that. What can you do with an £8,000 pension pot? What's the alternative?
"The biggest worry has not been people who are unadvised, it has been reckless conservatism. In a world of annuitisation, get that wrong and you are stuck until your death. If people are going into drawdown, that's a fixable problem but an awful lot of people buying a lousy annuity isn't."