Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
Quick links:
  • Home
  • The Actuary Issues
  • September 2013
09

Whitehall urged to 're-set' retirement process

Open-access content 20th September 2013

Government departments, regulators and key industry experts should come together and reset the ‘failing’ at-retirement process policy to improve pensioner income, investment management firm Hargreaves Lansdown has urged

Tom McPhail, head of pensions research at Hargreaves Lansdown, said the at-retirement processes, through which people convert their savings into an income, were not working.

He said: 'Only a minority of investors are shopping around effectively but many more are being let down by a system which needs a thorough overhaul.'

Hargreaves Lansdown has provided some recommendations on how to improve the process of converting retirement savings into income. The firm wants a reform of 'trivial' commutation rules. 

'If it were easier to take small defined contribution pots as a lump sum then investors could get more control of their savings, the Treasury could get its slice of tax sooner and the pensions industry would be able to deal more efficiently with the remaining larger pension pots,' the firm said.

The Treasury also needs to simplify the 'myriad' layers of lifetime allowance (LTA) protection, warned Hargreaves Lansdown. 

'If the Liberal Democrats get their way and reduce the LTA to £1m, then there'll be even more [layers],' continued the firm. 

'The Treasury's policy of progressively restricting the permitted level of tax-free pension savings is stifling the savings culture and adding to the world's over-supply of bureaucracy.'

Hargreaves Lansdown also called for the retirement process to start earlier. It 'shouldn't be left until the last six months before retirement. Wake-up packs and the at-retirement decisions making should be started five years before retirement'. 

Another area to improve was investor engagement. Savers should not rely on their 'default option' and shop around for a retirement income solution. 

Hargreaves Lansdown said it would write to the Treasury, Department for Work and Pensions and the Financial Conduct Authority, as well as the Association of British Insurers and the National Association of Pension Funds to propose a basic review of the at-retirement system.

A DWP spokeswoman said: 'The government recognises the importance of people being able to make good decisions about their pension savings at the point of retirement, which is why the government has been working with industry, consumer groups and other stakeholders to improve the process for consumers at retirement.

'The government values industry collaboration on these issues and welcomes stakeholder input.'

This article appeared in our September 2013 issue of The Actuary.
Click here to view this issue
Filed in:
09
Topics:
Pensions
Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Actuarial Analyst - Pensions to Life

London (Central)
study support, package
Reference
119042

Reinsurance Technician

London (Central)
Negotiable
Reference
119041

Pricing Actuary/Analyst (Casualty)

London, England
£60000 - £80000 per annum
Reference
119040
See all jobs »
 
 
 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2020 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited, Level 5, 78 Chamber Street, London, E1 8BL. Tel: 020 7880 6200