Chancellor George Osborne has radically overhauled the annuities sector and rightly given people of pensionable age access to their money.
Of course, the doomsayers have already been shouting about people being profligate with their pots in early retirement then falling back on the state for long-term care.
This is a pessimistic red herring. The changes call for good financial advice and relevant warnings.
But we must not let it detract from the reality that Mr Osborne will go down as one of the most interesting post-war reforming chancellors, the man who gave savers back their long-term savings, and, in the process, stopped annuity providers from pocketing what remained of dead annuitants’ money.
There will also be new investment opportunities for this generation of younger pensioners; the cautious ones will hedge their late retirement incomes and long- term care costs by buying annuities which provide a basic income while investing the rest, or most of the remaining pot in small businesses.
Many will see buy-to-lets as a good vehicle for their investments, which may well lead to a bubble; others may simply shift part of the money in to Isas; and a small minority will think that going on a world cruise will be a good way to spend their money.
Whatever the case, the life office and fund management sectors can already be heard revising their business plans, preparing new products, tweaking contracts, and stockpiling marketing literature for when the starter gates fly.
Of course there is a risk, that is why it is imperative that government issues the strongest possible warning that those who squander their pension pots run the risk of ending up in a work house.
But for millions of people, the vast majority, their pensions savings will be the most cash they have ever had at their disposal at anyone time. It will create massive new opportunities for good, sound, expert financial advice and wealth management, which will call for a tough unforgiving regime of regulatory rules for advisers, product providers, banks and, most of all, the predatory crooks who will come out of the woodwork looking to grab as much of other people’s money as they could.
But there is unfinished business: there are still millions of people locked in defined benefit schemes and public sector pensions who will miss out on this generosity. They may well turn out to be the lucky ones, but only time will tell.
