Post Pension-Freedoms: Key Recommendations


Matt Ward

Communications Director

AKG Financial Analytics Ltd

AKG’s 2018 Pension Freedoms Paper – Grasping the nettle: Working together to achieve better retirement outcomes – is a wide-ranging paper which looks at the impact of pension freedoms on key market participants and the direction of travel in the market following the introduction of the changes three years ago.

AKG also wanted to look ahead at some of the ways in which the industry can work together more collaboratively on key initiatives over the coming years in order to achieve a stronger and more coherent pension/retirement framework in the UK.

Here, I’ve outlined the activities and initiatives that AKG believes the industry needs to get behind, which in turn can help to provide crucial underpin for a successfully functioning pension/retirement market.

Key pensions infrastructure and collaborative efforts required for long-term market success

The Money Advice Service (MAS) is in the process of merging with the other two public guidance bodies, Pension Wise and The Pensions Advisory Service. This process is due for completion after Autumn 2018. There is huge expectation and pressure on this new single guidance body to provide a core resource for the pension/retirement market in terms of supporting consumers with education, information and guidance, effectively playing the role of ‘Everest base camp’. But the industry will need to collaborate and positively interact with the new single guidance body to help this achieve its goals.

The plan behind the Pension Dashboard, which is now the responsibility of the DWP and is due to be launched in 2019, is to create the technology to enable customers to see all of their retirement pots in one place at the same time, giving them a greater awareness of their assets and how to plan for their retirement. This is another initiative with a lot riding on it and if done well could be transformational from a pensions information perspective. We are yet to see if this initiative will be underpinned with legislative requirements but coverage needs to be comprehensive to be effective and so ultimately provider buy-in and collaboration will be critical, as will interaction and integration with other key parties and systems.

Better education on money, including spending requirements and planning, pensions and investments is vital. Whether this be for school kids, early stage auto-enrolment scheme members or those approaching retirement. It’s important to consider what type of education and intervention might be required at different life stages – the same mantra applies for information and guidance – but we can’t continue to kick education into the long grass.

Furthermore, with public funding strained there will need to be private sector investment and initiatives to support those already trying to make a difference here.

We need to continue to consider and develop how we best engage with technology in financial services. It should be seen as a key facilitator to creating cost efficiencies across a range of areas including the delivery of products, funds and advice. With a regulator which is encouraging technological development and concept testing it will be very interesting to see what emerges from the sandbox during 2018/19 and beyond, whether this be for financial services applications and services more broadly or those which can directly benefit the pensions/retirement market.

We need to continue to attract fresh talent and ideas into the financial services industry, whether this be new blood for roles in design, servicing, technology and communications. And we certainly need to encourage recruitment and development of new advisers and paraplanners to underpin the future provision of advice and thus the key delivery of solutions.

Continued improvements in communication initiatives and style/type of language used with pension/retirement market customers need to be targeted and there are some signs of good early progress here. We also need to establish if and where regulation might be a barrier to improvements in this area. These improvements should be targeted across the market for example incorporating both DB and DC pensions.

Commitment, continuity and collaboration in policy and regulation to provide a steady base from which the pensions/retirement market can build on the progress made to date. This will help to provide all market participants and stakeholders with more confidence.

Ultimately these initiatives, developments and required changes in approach should not be viewed in isolation and they will require longer term thinking than is often permitted in an industry where the focus is often on short term success and failure.

Similarly, no one entity will hold all the answers or be in a position to solve all ills in the industry and so consistent and collaborative cross-industry efforts from a range of stakeholders and participants will be required to achieve this stronger and more coherent pension/retirement framework in the UK.

You can view the full AKG paper via