The Association of British Insurers (ABI) has urged the government to remove the legal requirement for savers to pay for mandatory advice.
The ABI said the requirement, which means savers with guaranteed annuity rates of £30,000 or more are required to pay for advice if they want to move their money, meant "some customers have found the [pension] freedoms difficult to access".
In a joint letter to chancellor George Osborne and the Financial Conduct Authority's CEO Martin Wheatley, the ABI's chairman Paul Evans and director general Huw Evans proposed a new "customer control" mechanism.
This would allow people to access their pot by getting free guidance from Pension Wise or the Pension Advisory Service.
The ABI also outlined an action plan for customers to get the most from the new pension freedoms and said that current regulatory requirements were "not enough to ensure the benefits of the reforms can be universally felt".
The ABI officials said: "This action plan proposes a solution to the problem of customers unable or unwilling to access advice in the circumstances set out in the law. We also request the urgent establishment of a joint taskforce between the government, regulators, providers and advisors to work through the outstanding issues and deal decisively with them."
The action plan follows the Treasury’s announcement about the launch of a consultation on early exit fees last week.
Huw Evans said: "We agree that further clarity is needed and have been calling for it for some time. But we reject any suggestions that the industry is putting up unnecessary obstacles to hinder customers exercising their pension options.
"It needs to be remembered that the vast majority of customers eligible for the pension freedoms will not face any early exit fee. Where one is charged it is not a penalty for leaving early, but to cover the costs of setting up the pension, particularly commission."
Other key elements of the plan include:
- Establish a joint taskforce between the government, the regulators, providers and advisers to deal decisively with the remaining issues
- The FCA to conduct a broader review of the balance of responsibility between customers and providers in light of pension flexibility
- The FCA to set out clearly those products and circumstances where advice should be taken
- The Treasury to work with the FCA and Department for Work and Pensions (DWP) to clarify the definition and valuation of safeguarded benefits, by a change in the law
- Providers to work with the FCA and DWP to clarify the definition and valuation of safeguarded benefits, by a change in the law
- The government to publish Pension Wise data and restart marketing to ensure maximum
- The ABI and its members to start work on developing standardised language on products and charges to help customers consider their options
- The ABI and its members to ensure clear, consistent communications to customers on the products and services available
