5th June 2015
New pensions minister Ros Altmann has accused pension providers for ‘failing to move with the times’ after insurer Friends Life said it would not provide access to pensions under the new freedoms.
Under the new pension freedoms, insurers have started to offer ‘flexi-access drawdown’ through which everyone can access their pension as cash.
Friends Life had planned to offer drawdown on its pensions but has now reversed the decision due to the ‘complex nature’ of its pensions book. This means Friends Life pension customers will have to cash in the entire pot, buy an annuity or transfer to another pension provider, which is costly, if they want to use flexi-access.
Altmann (pictured) said she was ‘disappointed’ by Friends’ decision to U-turn.
Speaking to the Daily Telegraph, she said: ‘I find it disappointing that even the larger pension companies are not allowing their customers to take advantage of the new freedoms that the government has introduced for them.
‘The [pensions] industry has had over a year to prepare for the changes – and it is encouraging that some firms have risen to the challenge. But others still seem to be failing to move with the times and are still acting as if nothing has changed.’