The government rushed through its pensions freedom reforms and the policy needed a greater period of ‘planning and testing’ before launch, the Financial Conduct Authority (FCA) chairman Charles Randell said in a speech today.
In a hard-hitting speech to the Cambridge Economic Crime Symposium, Randell also:
- Lamented the £580 million which has fallen on the Financial Services Compensation Scheme (FSCS) due to bad pension advice;
- Challenged tax relief being given on high-risk, unregulated investments;
- Revealed the FCA has 40 live investigations over unauthorised firms.
When discussing pension freedoms, Randell questioned the way ex-chancellor George Osborne’s pension freedoms was implemented only a year after it was announced in 2014 and without safeguards in place.
‘I don’t express a view on the wisdom of the pension freedom policy as such,’ Randell said. ‘But the Work & Pensions Committee has asked challenging questions about the execution of this policy.
‘It was implemented in 2015, relatively soon after it was announced in 2014, but responses to the risk of skimming and scamming are continuing to be developed. For example, a ban on cold calling became effective at the beginning of 2019 and the FCA proposes to ban contingent charging for pension transfer advice from next year.
‘All policymakers, including the FCA, need to learn lessons for the future from this experience. One of which is that a very major change of policy like this needs a substantial period of planning and testing so that all the necessary safeguards against skimming and scamming are integrated before it is launched.’
Randell said the reforms mean ‘more individual responsibility and freedom of choice are likely to mean more risk to consumer’.