Pickering says that consumers are being confused by the bewildering choice of money purchase product...
Pickering says that consumers are being confused by the bewildering choice of money purchase products, marketing wrappers and occupation pension arrangements, and that this means the range of products on offer needs to be simplified.
Instead, the market should be limited to three generic products only: occupational defined benefit pensions, employer-sponsored money-purchase arrangements, and individual pensions arrangements.
A big issue will be how the Inland Revenue reacts to this proposal, but Pickering says that is not in his hands and the outcome will not be known until the Revenue releases its own review into the issue.
Pickering says he hopes the Department of Work and Pensions and the Revenue do the right thing and make the future regime simpler to encourage innovation of simpler products.
He warns, however, that product providers should not seek to "differentiate the undifferentiatable", for example by selling stakeholder pensions as being generically different to those on offer from other providers.
Choice is good, but Pickering warns that "too much choice which overwhelms is counterproductive."
An additional benefit of restricting the type of pension types will be to reduce the risk of mis-selling, he adds.
Without simplifying choice, the government runs the risk of not being able to reach its goal, which is to persuade consumers to put off consumption today in favour of saving for future consumption.
Data quality is key
Granted leave to appeal the judgement