A-Day regulation was intended to simplify pensions and bring much needed flexibility to the regime. As the first anniversary passes it is a great time to look back and rate the regulation's success. There are indeed many positives to the new regime - people joining schemes for the first time have the benefit of clearer rules in areas such as contributions and tax free cash as well as increased flexibility.
In addition to this the run up to A-Day was beneficial in that it demonstrated the industry's ability to take on board the vast amount of new requirements and prepare for the new regime within a relatively short space of time. The path was of course not easy. Guidance to legislation was often issued late and the industry often found itself trying to work out how to deal with often conflicting sets of rules. However, again there are great positives to be taken from this in that the process forced the industry to enter into regular and constructive dialogue with agencies such as the DWP and HMRC which can only be a good thing.
When trying to define whether A-Day was a success the initial indications are positive. Advisers and providers have reported huge increases in pension business over the past year with the amount of SIPP business being written growing dramatically.
So in terms of increased business then A-Day has indeed been a success even if only in the short term. However, when our Big Question respondents (pages 32-34) were asked if they thought A-Day had been a success the results were rather mixed.
While many welcomed the boost to their business there was also a sense that if you look below the surface the regulations had not gone far enough. While the regime has been made more flexible the industry has been left with a raft of complicated tax rules to interpret. While pre-A-Day there were 1,350 pages of guidance and regulation this has since swelled to around 2,100 - hardly a simplification by any definition. Also the well publicised U-turns on issues such as alternatively secured pensions (ASP) and the possibility of including residential property in a pension have undeniably dented consumer confidence in the system.
So while many believe that the changes ushered in last April have made the industry more attractive there is also a sense that by meddling with and watering down their previous proposals the government has missed out on the opportunity to really make a lasting difference.
Putting the tech into protection
Square Mile’s series of informal interviews
Fallout from Haywood suspension
Launching later in 2019
£80bn funds under calculation