NEWS:

Following the publication of ILC-UK’s report “The Retail Distribution Review and Small Pension Pots” in March this year, the leading think tank dedicated to addressing issues of longevity, ageing and population change, has today announced that it will host a Retirement Income Summit at the Actuarial Profession, on 20th June 2012. The Summit is supported by the UK’s largest insurer Aviva and pensions specialist Partnership.

Ministers from HM Treasury and the DWP alongside the FSA have been invited to participate in the Summit, which will provide a public forum to discuss the concerns raised in ILC-UK’s report that the impending regulatory environment for financial advice (RDR) may result in an ‘advice gap’ where the poorest and least well-off pensioners will fail to receive critical financial advice. ILC-UK believes this may result in consumer detriment, for those who arguably are in most need of support.

Baroness Greengross, Chief Executive of ILC-UK said
“The end of compulsory annuitisation, the introduction of the RDR, the growth in the number of small pension pots and the introduction of auto enrolment are all coming together at the same time. Put together, the pensions policy landscape faces fundamental change. For the sake of both today's and tomorrow's pensioners, ILC-UK urge the Treasury, DWP and the FSA to join us at the Retirement Income Summit 20th June to discuss these issues."

Steve Groves, Chief Executive of Partnership said:
The key changes brought by the RDR are to be welcomed. A transparent, professional advice market is in everyone’s interest. However they risk creating an “advice apartheid” unless there is greater clarity on what is information rather than advice and the processes to access financial products are simplified.”

Trevor Matthews, Chief Executive, Aviva UK & Ireland added:
“By bringing together Government, regulators and the pension industry we want to explore ways to help consumers get the best possible income in retirement. One of the unintended consequences of the Retail Distribution Review may be to limit access to advice at retirement, particularly for consumers with moderate savings who may not wish to pay a fee for full independent advice. By continuing to improve access to the Open Market Option and help retirees to shop around we can make a very real difference to consumers’ income in retirement.”

Retirement Income Summit Registration
Journalists interested in accreditation for the Retirement Income Summit should email David Sinclair at ILC-UK
Individuals and organisations interested in registering an interest in attending the Retirement Income Summit should email events@ilcuk.org.uk.

Background

  • On 1 March 2012, ILC-UK published a report which explored the impact of the Retail Distribution Review on people with small pension pots.
  • Alongside the publication of “The Retail Distribution Review and small pension pots”, a cross party group of MPs and senior representatives of the financial services industry, have urged the Government and FSA to act to ensure that the Retail Distribution Review does not widen the advice gap for people with small pension pots.
  • We published open letter to Mark Hoban MP (Financial Secretary to the Treasury), Steve Webb MP (Minister for Pensions, DWP) and Lord Adair Turner (Chair, FSA) calling on the Government and FSA to host a ‘retirement income summit’ to protect the poorest and least well-off pensioners. The letter has been signed by senior Conservative, Labour, and Liberal Democrat politicians.
  • The letter was signed by:Dame Anne Begg MP (Chair, Work and Pensions Select Committee), Clive Bolton (At Retirement Director, Aviva), Jonathan Evans MP (Chair, All Party Parliamentary Group on Insurance and Financial Services), Frank Field MP, Baroness Sally Greengross (ILC-UK Chief Executive), Steve Groves (Chief Executive, Partnership), Chris Hannant (Policy Director AIFA), Michael Lake CBE (ILC-UK Chairman & Former Chief Executive of Help the Aged), Lord Lipsey (President, Society of Later Life Advisers), Ivan Martin (Chair, Sesame), Lord John McFall (former Chair, Workplace Retirement Income Commission), Paul McMillan (Editor Money Marketing), Tom McPhail (Hargreaves Lansdown and Pensions Income Choice Association), Lord Newby, (Co-Chair, Liberal Democrat Treasury Parliamentary Party Committee), Joanne Segars (Chief Executive National Association of Pension Funds), Elliot Varnell (Milliman), Keith Boughton (Director, Insurance and Payments, Xafinity Paymaster).

In “The Retail Distribution Review and small pension pots”, ILC-UK recommended that

  • the government and the FSA should investigate in more detail the opportunities to mitigate the implications of RDR for financial advice for people with small pension pots, and in particular people who could benefit from an enhanced annuity by shopping around;
  • the government and the FSA should clarify the distinction between the provision of information and advice, and the extent to which providers are able to guide potential or existing customers without being deemed to give regulated advice;
  • the FSA restores a concern over the quantity of financial advice – as well as quality – to the heart of the RDR process;
  • the government establishes mechanisms to ‘join up’ the public policy agendas on financial advice and enabling saving;
  • the government continues to promote the open market option in the annuities market, and as such considers how to mitigate the potential impact of RDR changes on people’s ability to shop around for the best annuity deal; and
  • the FSA publishes open market option take-up by wealth cohort – providing greater transparency about which people actually exercise their choice to shop around for the best annuity at retirement.


About ILC-UK The International Longevity Centre-UK is the leading think tank on longevity and demographic change. It is an independent, non-partisan think-tank dedicated to addressing issues of longevity, ageing and population change. We develop ideas, undertake research and create a forum for debate.

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