The Pension Reforms – the known unknown

There is just over a month to go until the Freedom and Choice reforms come into force and it is pretty obvious that our ‘known unknown’ remains what the British public will do.

We know there have been more than 200,000 people delaying the decision from last year provoking fears that lots of people will simply take the cash.

We have had many surveys of what the public plan to do with their pension money and indeed IFA views about their clients will do, though IFAs believe generally that clients who have bothered to save will not want to blow all their money but secure an income.

Clearly asking clients what they believe will happen is a sensible approach and is really all the financial services industry can hope to do. But we wonder whether we will only really know what is going to happen after April 7th.

Our work to date has been on the qualitative side involving at least six months of work – as discussed in the following white paper – the Pension Reforms – what are your clients thinking.

From talking to a wide range of people in focus groups, we found a considerable gap in knowledge among all but the most sophisticated investors, some scepticism about annuities and the pension industry, but also a willingness to understand what the reforms mean for them.

Our view is that with the correct online tools and websites that tell stories and examples of what ‘people like you’ may do, we can help customers understand and that this surely will lead to more informed outcomes.

Indeed, understanding customers, and helping customers understand the reforms is arguably the most we can do for now. The white paper sets out what we have found out so far. But as always we would love to hear your views.