Guest comment: Five years of freedoms

Covid-19 may have, rightly, taken all the headlines recently, so it’s easy to forget that it’s been five years since pension freedoms came into place. Five years on, and debate about their suitability and effectiveness continues.

The key issue is about how to support savers moving from a default saving position, to making critical decisions about how they access those savings to fund retirement.

In 2018, we launched Hitting the Target, following an industry-wide consultation. In it, the PLSA said it wanted to see guided at retirement decisions – a form of signposting by schemes that didn’t offer decumulation products and also a set of standards for what products should offer.

Step forward to 2020 and we can see schemes and providers developing new solutions; some of which will be highlighted in our upcoming pension landscape research.

However, there are still some barriers to innovation, development, and delivery, and getting the balance right for schemes and savers. This is why we have been seeking to further develop a new approach.

We want to see a system that supports savers and the type of engagement we see in reality, while mitigating some of the risks of running out of money and the complexity of decision making.

We’ll start with sharing our research shortly, and call for evidence on our proposals later in the year.

Five years on, it’s time to push forward a more radical approach to ensure savers are getting the best options available when it comes time to retire.

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