EVENTS:

Pensions,Work and Retirement

7th November 2012, London, 08:30 - 10:00

On the 7th November, we will be hosting a private breakfast launch of ILC-UK’s “Advice and Small Pension Pots” policy report which sets out recommendations to ensure that the many people with small pension funds at retirement do not lose access to financial advice after the introduction of the Retail Distribution Review (RDR) in January 2013.

The report has been produced following the ILC-UK Retirement Income Summit, held at the Actuarial Profession and supported by Aviva and Partnership, earlier this year.

We are inviting journalists, senior politicians and policy experts to attend this launch and discuss the findings.

The implementation of the RDR is a once in a generation chance to raise professional standards in the advice sector and to change the way people pay for financial advice.

However, there is widespread concern that an unintended consequence of its implementation could be that those on modest incomes will be excluded from or priced out of the advice market.

In March 2012 the ILC-UK published a report entitled, The Retail Distribution Review and Small Pension Pots, which explored the impact the RDR would have on access to advice for those with small pension pots.

Alongside the report, the ILC-UK published an open letter to Mark Hoban MP (then Financial Secretary to the Treasury), Steve Webb MP (Minister for Pensions DWP), and Lord Adair Turner (then Chairman of the FSA), highlighting the need for action. The letter was signed by senior politicians across all parties, trade associations, providers, financial advisers and representative bodies. (http://www.ilcuk.org.uk/index.php/news/news_posts/press_release_government_and_fsa_must_act_now_to_protect_the_retirement_inc )

The decision to purchase an annuity or other retirement income product is extremely important and, for many, a once-in-a-lifetime and irreversible decision. The current situation is already sub-optimal:

  • The difference between the best and worst annuity rates can be up to 40%;
  • Too few exercise or fully understand the benefits of exercising the Open Market Option (OMO - the right to shop around for the best annuity rate)
  • Only 17% of people purchased an enhanced annuity (which can provide greater income in retirement for those who are eligible for health and lifestyle conditions), although 40% or more may be eligible.
  • 70% of those at retirement have pension funds of £40,000 or less

If you would like more information about the event, please contact events@ilcuk.org.uk.