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Ross Altmann blaming pension providers is not constructive

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Matthew Phillips (pictured), managing director at Thomas Miller Investment, refutes the Pension Minister’s suggestion that providers are to blame for the low take up of Pension Wise…

I have an immense amount of time for Ros Altmann. Her campaigning and work on pensions and savings speaks for itself. However, the recent interview blaming pension providers for the low take up of Pension Wise is missing the point, and seems to be wilfully blind to what many in the profession had highlighted before. To put it bluntly, Pensions Wise was rushed through, not thought out and not well planned. We have said that before and no one should be surprised at the poor take up. 
 
We have been staunch advocates of the changes that have taken place and agree with her that treating people like children when they come to retire is counter-productive. The fact that a minority may be frivolous with their pension is the lesser of the two evils compared to the fact that most are not saving for their pension anyway. It is hoped that the flexibility will encourage more people to save and those who do save, to save greater amounts.
 
To be clear, we want Pension Wise to work. A better informed population is better for all of us. That said, the reason it is not working is a mixture of poor government planning, and providers, who let’s remind ourselves are commercial enterprises with shareholder responsibilities, having been left to pick up the slack. We all have to shoulder the burden of education of the population, and tit for tat arguments are not going to help.  A bit of honesty, and dare I say humility, wouldn’t have gone amiss here. What we really need, as we have said before, is clarity around pensions.
 
So firstly, a commitment from governments that they are going to leave pensions alone. Stop tinkering. Allow the providers, advisers and clients to get used to changes and plan properly. 

Secondly, government should take responsibility for providing clarity about what Pension Wise is, and possibly introduce some set wording that must appear at the top of communications from providers. It’s not advice but good independent information. 

Finally, a plan that would encourage the greater take up of financial advice. We would hope that that is independent advice, and have suggested that raising the amount that fee-based advice can be paid for by the employer before it becomes a P11d would be one way to encourage people to have proper advice before they retire.
 
This is constructive. Simply blaming some of the largest stakeholders is not.

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