The government must support the Cridland Review’s proposals for a mid-career financial review and retirement plan, L&G has argued.

As part of its response to the Work and Pensions Select Committee’s Pensions Freedoms Inquiry, L&G has called for the government to consider supporting the Cridland Review’s concept by using similar mechanisms that HMRC uses for annual tax returns to advocate the creation of a personal balance sheet

Whilst a strong supporter of the freedom and choice offered by Pension Freedoms, Legal & General has raised concerns about individuals accessing their pension pots without seeking advice on the best course of action. This is often done without having spent sufficient time planning ahead. The response to the Pensions Freedoms Inquiry therefore recommended the need to engage individuals with their pension from age 50 or younger.

As part of its response, Legal & General also called for the government to consider the importance of pensions as a long-term investment vehicle for the UK economy in any future reforms. The company is a strong advocate of investment in UK infrastructure, having invested £12bn in projects from retirement housing to urban regeneration. Legal & General’s response called on government and industry to work more closely. This would help better combine consumer pension freedoms with the ability under prudential regulation for insurers and pension funds to invest in long-term projects and non-publicly-traded or illiquid assets.

Legal & General retail retirement managing director Chris Knight said:“Pension freedoms has been a big step for the industry and has rightly given consumers more choice when it comes to planning their retirement income. However, as part of this inquiry, we wanted to raise awareness about some areas of the freedom and choice reforms which we would like to see re-considered in the Committee’s findings.

“We are concerned that a significant minority are accessing their pension pots without taking important guidance and advice or planning sufficiently well ahead for a period of their lives that can now span up to 30 or more years. We therefore want the government to really consider the Cridland Review’s proposals for an annual mid-career review, beginning well before retirement, to help consumers think ahead and get the most out of later life.

“Pensions are also an intergenerational contract that should benefit all ages in society. If we are to maintain and update this contract for the future, it will be essential that any further government reforms consider the role of ‘slow money’ as an essential part of the pensions system. Government and industry must work more closely with industry to this end to make pensions work not just for the individual, but their family and our society too.”

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