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
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • December 2014
12

Financial advisors fear spendthrift pensioners could undermine reforms

Open-access content Wednesday 10th December 2014 — updated 5.13pm, Wednesday 29th April 2020

The viability of the government’s pension liberalisation reforms could be undermined if pensioners start to run out of money before the end of their life, financial advisers have warned.

A poll by the insurance firm MetLife found that 77% of the 114 specialist retirement advisers believed that pensioners running out of money was biggest threat to the change.

In this year's Budget, Chancellor George Osborne announced the reforms, which will remove the need to buy an annuity with a saved pension pot. Pensions minister Steve Webb then famously said it was people's choice whether to buy a Lamborghini sports cars with these savings once the reforms take effect next April.

However, according to the poll, the risk of people spending down their savings is the biggest challenge to implementing the plans, ahead of the launch of the government guidance sessions and access to advice.

Dominic Grinstead, managing director of MetLife UK, said the introduction of reforms could be used to create a world-leading pensions system.

'But clearly there are concerns and advisers believe the biggest risk to the success of the reforms is people spending all their money and running into trouble as a result,' he said. 'Annuities did at least provide an income for life although they had many other major flaws.'

Grinstead said advisers have a vital role to play in ensuring savers were aware of all their retirement income options.

He called for a new guaranteed drawdown option to be recognised in the guidance service being launched by the government to coincide with the changes.

This could allow pensioners to take advantage of the new flexible pensions framework while retaining the security of income for life, Grinstead said.

 

This article appeared in our December 2014 issue of The Actuary.
Click here to view this issue
Filed in:
12
Topics:
Pensions

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Senior Underwriting Risk Manager

London (Central)
£85K-£95K + Benefits
Reference
124386

Reserving Manager (Contract)

London (Central)
£1200 - £1400 per day
Reference
124385

Life Actuary - Contract - IFRS 17 Financial Impact

England, London / England, Bristol / North Yorkshire, England
£900 - £1150 per day
Reference
124384
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

© 2022 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited, 71-75 Shelton Street, London WC2H 9JQ. Tel: 020 7880 6200