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
    • Moody's - Climate Risk Insurers series
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • July 2014
07

Osborne promises pension savers independent advice

Open-access content Monday 21st July 2014 — updated 5.13pm, Wednesday 29th April 2020

Millions of pension savers are receive free and impartial guidance on their retirement options from independent organisations rather than scheme providers, the government announced today.

2

Setting out the government's response to the consultation on pension changes, Chancellor George Osborne confirmed his intentions to go ahead with the reform, seen as the biggest change to how people access their pension in almost a century.

He said the guidance would be offered through a broad range of channels, including web-based, phone-based as well as face-to-face. The advice will be delivered by the Money Advice Service and The Pension Advisory Service, he said.

From April, the government will also allow savers to take out their money from their pension pots when they reach the age of 55 and spend it as they see fit. Tax penalties will be reduced on those who withdraw their savings in a lump sum and subject to marginal tax rates. 

The new rules follow a government consultation on 'how best to deliver the radical changes', announced in the Budget. In March, Osborne unveiled a radical liberalisation of defined contribution pensions when he scrapped a rule forcing people to buy an annuity.

The chancellor said today that he was pleased that responses to the proposals laid out in the consultation had been 'overwhelmingly positive'.

'These reforms create more choices for individuals, and the government wants people to be equipped and ready to make informed decisions,' he said in a ministerial statement.

'Individuals are supporting greater freedom and choice and the pensions and insurance industry [are] ready for the challenge of creating new, flexible products, which better suit individual needs.

'I can also confirm today that a new override will be introduced to ensure that pension schemes are able to offer individuals flexible access to their savings, and the tax rules will be amended to allow providers to develop new retirement income products that are tailored to the needs of individual consumers.'

He also confirmed that changes will be made to allow individuals to transfer from private sector defined benefit schemes to DC pension schemes, depending on two advice conditions being introduced to protect individuals and schemes. He said there will be a new requirement for individuals to take impartial financial advice before a transfer can be accepted and new guidance for trustees on the use of their existing powers to delay transfer payments and take account of scheme funding levels when deciding on transfer values.

Commenting on the Treasury announcement, Association of Consulting Actuaries chair David Fairs said he was pleased that the 'guidance guarantee' would be provided by independent organisations.   

The ACA also welcomed the government's commitment to change tax rules so innovative products can be developed.

Fairs also said the government's decision to allow individuals to continue to be able to transfer funds from DB to DC schemes with certain advice conditions was a 'sensible and pragmatic solution and reflects the guidance we gave to government when responding to the consultation'. 

Fairs said: 'Banning private sector DB to DC transfers - one of the options in the consultation paper - would have put UK plc at a huge commercial disadvantage with Europe as it would effectively have locked companies into funding for buy-out.'

Actuaries Lane Clark & Peacock added that it was pleased that Treasury concluded that DB to DC transfers can continue.

LCP partner Jonathan Camfield said: 'We expect many employers and trustees of pension schemes to review their retirement options and processes in the run up to April 2015, and most to conclude that it makes sense to offer the new flexibility to their members.'

This article appeared in our July 2014 issue of The Actuary .
Click here to view this issue

You may also be interested in...

Webb cuts deferred state pension increase to 5.8%

The state pension enhancement enjoyed by people who choose to defer taking the payment is to be cut by almost half, the government announced today.
Tuesday 22nd July 2014
Open-access content

One in ten pensioners 'are millionaires', Prudential finds

Over a million of pensioner households in the UK now have a total wealth of more than £1m, according to analysis by Prudential.
Friday 18th July 2014
Open-access content

Auto-enrolment could see £495bn saved in DC assets, PPI finds

Up to 15 million people will be actively saving in private sector workplace schemes by 2030, with up to £495bn in defined contribution assets, the Pensions Policy Institute has found.
Thursday 17th July 2014
Open-access content

Towers Watson: value of 'at-retirement' market set to hit £50bn

The UK ‘at retirement’ market will triple to £50bn by 2023, pushed by substantial annuity sales, according to analysis by Towers Watson.
Friday 25th July 2014
Open-access content

Retirees 'regret' annuity choice, survey reveals

More than two-thirds of retired people who accepted the annuities offered to them by their pension providers now regret it and would do things differently, a Just Retirement survey has revealed.
Tuesday 15th July 2014
Open-access content

Pensioners 'better off' in independent Scotland, SNP claims

A vote in favour of Scottish independence will see pensioners £260 a year better off, Scotland’s deputy first minister claimed today.
Friday 11th July 2014
Open-access content
Filed in
07
Topics
Pensions
Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Senior Reserving Analyst

London (City of)
Negotiable
Reference
149485

Senior GI Modeler - Capital and Planning

London (Central)
£ excellent
Reference
149436

Risk Oversight Manager

Flexible / hybrid with a minimum of 2 days per week office-based
£ excellent
Reference
149435
See all jobs »
 
 

Today's top reads

 
 

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

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
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

© 2023 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ