“Two months into the reforms, we are watching the market closely,” Smith said in a weekend press article.
The Government’s pension reforms, which took effect from 6 April this year, allowed people with defined contribution pension pots unrestricted lump sum withdrawals from their savings after age 55, ending a long standing and widely unpopular requirement for retirees to buy annuities.
Pension providers have reported a big surge in enquiries from clients wanting to access their pension pots following the reforms with demand for financial advice, flexible pension products and packaged investment solutions all seen higher.
“I know the pensions industry is working on the design of new and innovative drawdown products and many providers have stepped up to the plate and are already offering their customers flexibility. But I am concerned when I hear that some firms still appear to be dragging their feet,” he wrote.
Smith said he understood that some companies had struggled with practical difficulties, such as old IT systems, though he felt by now they should be playing a full role in enabling people to enjoy the new freedoms.
New pensions minister, Ros Altmann and economic secretary, Harriett Baldwin, have been tasked with talking to the relevant regulators and the industry in the coming weeks to see what can be done to tackle the delays.
“We will not hesitate to take action to ensure that consumers get a good deal, and if we have to we are prepared to name and shame those companies who are putting barriers in the way of people getting access to their money,” he said.
