By Lee Halpin

Taking back control and specifically less burdensome regulation was sold as one of the central arguments in favour for the UK withdrawing from the European Union. But recently it has felt like the pensions sector is going in a completely opposite direction, having seen a flurry of fresh regulations land around

the same time.

New rules and regulations have all been announced lately, namely how the increase to normal minimum pension age will work, the requirement for pension providers to give customers a stronger nudge to take up guidance when accessing their pension funds, granting pension scheme trustees powers to prevent pension transfers that carry a risk of being a scam, and requiring providers to offer a default investment option to customers.

Whilst this will keep many in the pensions industry busy well into 2022, the most important impact is how it will ultimately affect pension savers. With this in mind, I wish to draw attention to the first two areas concerning individuals accessing their pension savings.

The intention to increase the normal minimum pension age to age 57 on April 6, 2028 was announced at the start of the year, but a U-turn on part of the policy has only recently been communicated.

Originally, the proposals included a window until April 5, 2023, where individuals could join or transfer into a scheme that offered an unqualified right to take their pension before age 57, which would have protected them against the general uplift in the normal minimum pension age. This window, however, came to an abrupt close on November 3, some 518 days earlier than expected.

This now means there is no way round the increase to the normal minimum pension age

– ultimately when you were born, and the particular terms of your pension scheme will dictate the earliest age that you can access your pension savings. Whilst 2028 is some way off, the earlier individuals check exactly how they will be impacted by this change will give them the most time to plan accordingly.

Another significant move aims to increase take up of Pension Wise guidance – the free and impartial service that essentially covers the options now available under the pension freedoms.

The starting base is low – with only 14 per cent of people accessing defined contribution savings for the first time having used Pension Wise.

The proposed solution will see pension providers having to refer customers to Pension Wise guidance and explain the nature and purpose of such guidance, as part of the application process where the customer is wishing to access pension savings.

The policy intention is laudable – to better equip individuals to make an informed choice when it comes to accessing pension savings. This is extremely important as there is now greater flexibility than ever before and requires key decisions to be taken by individuals around how much money to take out, at what time, and in what form.

From a practical perspective, the implementation of this policy will mean pension providers have to offer to book a guidance appointment for the costumer. It is not difficult to imagine how this could be perceived as being a barrier to people being able to access their savings, with minimum fuss, especially where someone has already made up their mind about what they want to take.

It should also be noted that those who have previously received guidance from Pension Wise or taken regulated financial advice are not exempt from the new requirements.

Pension providers therefore have the difficult balancing act of being compliant with the new requirements, whilst trying to make the journey of accessing pension savings as smooth as possible to avoid customer dissatisfaction

or complaints.

The takeaway point here is if the need to access pension savings is time critical in any way, for example, helping out with a child’s house deposit, individuals will be well advised to start the process sooner rather than later, especially where they are thinking that they might benefit from the guidance available.

The regulator has already stated its future work in this area will explore additional ways to support consumers. Indeed, many respondents to the regulator’s consultation expressed views that the nudge to Pension Wise guidance comes too late. So more, rather than less, regulation appears as close to a certainty as you can get.

Given their long-term nature, people can often put their pension provision to the back of their minds. But recent events are a good example that periodic checks are necessary even if it is just to confirm the current regulations can still give you what you expect, when you expect it, or where you can get support if you need it.

Lee Halpin is head of technical services @sipp.