Happy Birthday! Two years into pensions freedoms, how have the reforms gone down?

Oliver Gill
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George Osborne (left) and David Cameron were chancellor and Prime Minister when pension freedoms were launched (Source: Getty)

Two years ago the world was a pretty different place. While Britain may have had its differences with the EU, leaving wasn't on the cards. And as for the thought of Donald Trump as US president...

Of course, in April 2015 it was the Dave and George show. In particular, it was the man who was to become the editor of the London Evening Standard (yep, who'd have thought that too?) who took centre stage with the roll-out of his landmark pensions freedom reforms.

The idea was to give pensioners more choice with what they could do with their retirement savings. Some will argue the changes have hit the annuity market irrecovably.

Read more: With £9.2bn cashed in, have pension freedoms been an unequivocal success?

The idea at the time was to create a secondary annuity market so people could cash-in and cash-out. Such plans were binned last year.

"It is still early days for pensions flexibilities," said Newton Investment Management's head of defined contribution benefits Catherine Doyle.

Although drawdown may appear to be the domain of the mass affluent, flexibility will become increasingly important to many since the era of working one day and stopping the next is likely to become an anachronism.


"With great power comes great responsibility," Uncle Ben told Peter Parker in the comic book/movie/cartoon Spiderman

More freedom around pensions has given the UK's retirees a fair chunk of power over what they do with their money. The concern at the time was whether people would be responsible with it or head out and splash the cash on Lamborghinis.

Read more: Record lump sum take-up risks widespread pension poverty

Research released today by insurer LV indicates over half (52 per cent) of those reaching retirement age reckon they don't need any external help in deciding what to do with their money. Furthermore, more than one in five (22 per cent) believe taking advice is good value for money.

LV's head of policy Philip Brown said: “In April 2015, the pension reforms revolutionised the pensions market by giving consumers flexibility over their retirement options.

However these reforms also created greater complexity and even two years on it is apparent consumers still don’t have the necessary support to make the right decisions at retirement with the latest Financial Conduct Authority data and our research showing worryingly low numbers taking advice.

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