Rules designed to restrict the number of people who cash in their final salary pensions could mean savers miss out on £25bn, according to a specialist.
Since 2015’s freedom reforms reforms, billions of pounds have flooded out of gold-plated defined benefit (DB) schemes to more flexible modern pension plans.
The regulator, the Financial Conduct Authority (FCA), has warned that transferring would not suit most savers and that bad advice had cost people as much as £2bn. All transfers worth more than £30,000 must be advised on. The FCA is seeking to ban “contingent charging”, where an adviser only gets paid if a transfer goes through.
Responding to a consultation on the reforms, Tideway Investment, a pension firm, said the FCA’s negative view, and subsequent bad publicity, could mean consumers are convinced not to transfer and would miss out on huge sums.
3 November 2019