Giving more warning could have also had adverse effects, and could have see a torrent of money all on one day, Webb argues.
“There is an optimum here,” he says. “You don't want to do it overnight, but what's the right length of time? Yes, more notice could have been given, but there's an awful lot of hindsight.”
Cry for advice and guidance
One of the main reasons more timing was needed was so that guidance providers and advisers could prepare and the government could promote the benefits of getting help before people dove into their pots.
This is something the Work and Pensions Committee has looked into recently in its report on pension freedoms, where it recommended a number of areas where savers need more support with their pensions.
For example, since freedoms were introduced, it has been a long-running issue that the take up of guidance from Pension Wise is too low and that programmes to boost advice, such as the pensions allowance, are not working.
The report has therefore suggested automatic Pension Wise appointments should be trialled and that the advice allowance needs an overhaul.
The advice allowance, which came into being in April 2017, allows pension scheme members to withdraw £500 a year tax-free, up to three times in their life, to pay for financial advice.
However, uptake has been low with few providers offering this service to clients.
Ricky Chan, director and chartered financial planner at IFS Wealth & Pensions, says reviewing the advice allowance makes sense as “it’s clearly not being used by the majority of consumers and there are limitations of its use depending on the provider”.
He adds: “Hence if this were made easier, then we should see an uptick in usage for financial advice/guidance.”
Rachael Hall, founder of advice business Seven Stages, says more needs to be done to educate people on pensions jargon.
“We believe the key to improving better outcomes is to also improve financial literacy, so allowances could be extended to employers, encouraging them to make educational workshops available for members, which enhance financial wellbeing.”
Or is it down to savers themselves to go out and get advice?
Both the government and the FCA are introducing rules to “nudge” individuals to obtain guidance before accessing their pensions, but Tilley says these will not go far enough.
“Good quality advisers have existed and even free guidance has been available since the freedoms have been introduced,” he says. “In this instance availability of information on the internet, through guidance sites, through provider’s websites and multiple other outlets has meant that there are more than sufficient opportunities for the average individual to be aware of the tools that are available should those individuals wish to avail themselves of them.”
