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Scottish Friendly is today warning that, following recent reforms in pension legislation, the Government and regulator need to urgently work closer together to set out clear guidelines to the financial services industry.
Despite the reforms, the financial mutual says that many pensioners attempting to withdraw their cash lump sums are hitting stumbling blocks when it comes to actually accessing their money, often due to advisers and providers being cautious due to fear of mis-selling.
Neil Lovatt, Product Director at Scottish Friendly, said:
"While the Government’s pension freedom proposals were generally applauded, many providers and advisers, conscious of their regulatory and moral duty of care for their customers, had concerns that they could be exposed to later charges of mis-selling should clients later complain about little or no income later in life
"As such they have been cautious in dealing with people wanting to cash in their pensions; despite the fact the Government is eager to let consumers have ready access their savings.
"The passive-aggressive disagreement between the Government and the regulator needs to be resolved. We have a government set on ensuring pension freedom is available to all and that customers know how to spend their own money. On the other hand, we have a regulator who will not give clarity to providers and advisers on how to deal with clients who want to take their money, when doing so may not be in their best interests.
"The Government and the regulator need to start a more coherent and open dialogue and create a blueprint that can be articulated clearly for customers and the industry. Right now it feels like a couple of parents arguing with one another via their children."
Scottish Friendly is not responsible for the accuracy of the information displayed on externally linked third party websites. The Scottish Friendly Group of Companies consists of the following companies: Scottish Friendly Assurance Society Limited – Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Member of AFM, Member of ABI: Life, Savings and Investments. Scottish Friendly Asset Managers Limited – Authorised and regulated by the Financial Conduct Authority. Member of The Investment Association. Registered in Scotland No 187215: OEIC Managers, ISA Managers. Scottish Friendly Insurance Services Limited – Authorised and regulated by the Financial Conduct Authority. Registered in Scotland No 113007. SFIS (Nominees) Limited - Registered in Scotland No 397351. Head office: Scottish Friendly House, 16 Blythswood Square, Glasgow G2 4HJ.