It is the right time for some “fresh thinking” to get the pension freedoms working for all, the Pensions and Lifetime Savings Association has said, in response to the Financial Conduct Authority’s Retirement outcomes review.

Today is the deadline for responses to its consultation on its interim report, published in July, which identified issues with the drawdown market in the post-pension freedoms world. PLSA director of external affairs Graham Vidler said: “The time is right for some fresh thinking to get the pension freedoms working for all savers. We believe government and the FCA should take the lessons learnt from automatic enrolment and use them to develop a flourishing at-retirement market.”

Research by the PLSA, found that 84 per cent of retirees want an income from their pension savings. But, Vidler admitted that there is “no easy or obvious way for retirees to find a good quality income product for those who cannot or choose not to engage with complex financial choices”.

“We think that trustees should be able to select an appropriate income product for their scheme membership and signpost their members to it,” he stated. “Of course, retirees would be free to disregard this steer and make their own choices but providing clear signposting would help those who might otherwise have struggled to make a decision. Pension freedoms should not be about leaving people behind but helping everyone – irrespective of their level of engagement – make better choices.”

Also responding to the consultation, Nest chief customer officer Gavin Perera-Betts said he agrees that the retirement market does not work for many savers, particularly those on small to average incomes, who don’t tend to seek advice, shop around or feel confident making financial decisions.

“That means that the current advice market just isn’t appropriate for many of our membership. We believe our members risk paying more in charges and taxes, missing out on investment growth and most worryingly, either running out of money too soon or underspending their pots without the right support structures in place. With over five million members, that’s over five million reasons for change.

“While we support measures to help savers shop around and compare products, on its own this doesn’t meet the needs of our members. That is why we are calling for governed pathways, which we believe is the most appropriate solution for the majority of our members.”

In addition, 7IM co-founder and head of corporate development Justin Urquhart Stewart said: “The regulator is understandably concerned about the options and information available to people at the stage where they can access their pension. The interim findings are well researched and thoughtful, but unless we do more to get people to save and invest wisely long before this point it’s a bit like fretting over the pressure of your tyres when they’re actually bald.

“There is a huge education job to be done, and good quality online retirement tools have an important role to play. But compulsion is key: whilst auto enrolment is a start, the UK is on a journey that has to end with compulsion.”

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