Rob Wright, senior consultant at London-based specialist recruitment agency, MERJE says:
“This month’s pension reforms will affect over 4.5 million people across the country, with many experts predicting that the landmark changes will throw the industry into disarray, as consumers react quickly – and without appropriate advice – to the legislation.
“From now on, people over the age of 55 with Defined Contribution (DC) schemes were given the freedom to spend as much of their pensions savings as they like, subject to tax. Additionally, people with Defined Benefit (DB) pensions – which promise an annual income – are now able to swap it for a DC scheme. In terms of tax, people now also have the ability to take 25 per cent of their pension post as a tax-free lump sum.
“These revamps raised a number of eyebrows in the financial advisory sector when they were first announced in April 2014, due to the liberty they afford to the public. With this in mind, many employers have elected to strengthen their pension transfer teams, although current evidence from providers and advisers alike has yet to indicate an increase in the volume of enquiries. However, this lack of activity could be put down to the fact that people are still deliberating over their options, as well as being pre-occupied with the end of tax year and ISA season.
“In my opinion, more retirement and estate planning professionals will almost certainly be required to cope with the influx of anticipated queries, particularly those with pension qualifications, such as G60 or AF3. Such individuals are already highly sort-after in the pensions industry, but many deem the current salaries on offer for experienced advisers short of market expectations. In order to attract these candidates, employers will need to make their packages more attractive.
“Over the past few months, we’ve been inundated with news stories on the pension changes, along with adverts promising to offer seemingly free pensions advice, leaving many people confused as to which route to take. Therefore, it’s important that consumers are careful to only approach aptly qualified professionals to make sure they get the best advice.
“Although the Chartered Insurance Institute is yet to publish any figures, over the next few years I anticipate that there will be a noticeable increase in the amount of pension exams taken, as the legislation becomes more widely recognised – it’ll certainly be interesting to see how the market adjusts to the ground-breaking reforms.”