The third edition of the Retirement Market Data Bulletin has recently been released and although it makes interesting reading, I suppose it does leave many questions unanswered.
The biggest of these is “what actually would success look like and how do we know we have achieved it?”.

Sadly, I feel that it doesn’t matter how much data the FCA collect and I assure you it is a lot, we will never truly know if the pension freedoms were the right thing for the general public. Just looking at the data requests themselves is quite telling, there have been changes made in the requests each quarter making it impossible to get a true picture of any trends. This is possibly due to them still learning about how the freedoms really work in practice and the FCA has had to adapt their questions accordingly.

I guess the FCA were as much in the dark as we were when these radical announcements were made, but we had the advantage of some practical experience of those taking drawdown, large cash payments and even those stripping their funds out in their entirety. If the industry had been more involved in the early days we could have helped shape this data collection a lot quicker.

Don’t get me wrong, they did ask but not until the first questionnaire had been issued. There is data that just isn’t automatically recorded because it isn’t of relevance for other pension scheme reports or even things the members care about, so we have to manually pull some of the data together.

So what can we actually take from the data we do have? I think it really just tells us that we need more time and unfortunately more data to see what the real long term implications will be. It is clear to me that many pension savers were waiting for the changes to come in, especially as they did have a years notice.

There has been a rush on accessing cash, which now appears to be receding somewhat, but this could be a trend that returns at the start of the new tax year, although I suspect not. Annuities haven’t died the death as some feared, the percentage of pensions accessed through annuities is on the increase again.

Most concerning is the lack of advice taken in some areas such as UFPLS, which if we follow the theory of their introduction, will mostly be paid from occupational schemes not able to offer drawdown.

This could mean that they are losing out on valuable benefits, if no one is there to tell them about enhanced tax free cash they are unlikely to know to ask.

So all in all a fair amount of work and little output to tell us much, I hope it will improve but if they keep moving the goal posts we may never know.