Confusion reigns over pension plans

Steve Webb, Minister of State for Pensions (Getty Images)

Your questions are coming in for Pensions minister Steve Webb. What’s clear from most of them is that there are a lot of confused and concerned people out there.

That’s no surprise when you bear in mind that making the wrong decision about your retirement cash could leave you counting the cost for the rest of your life.

One correspondent asks about the major pension reforms that were announced in the last Budget and will come into force in April: “I would like to know the reasons for the rush? It puts us under an enormous pressure and that is not helpful for making the right decision.”

I will put that question to the minister but the answer seems obvious to my mind: it’s political imperative. With a general election in May, there are a lot of older people who by then may still have a massive feelgood factor generated by accessing their retirement pot.

There’s nothing like cash to put a sparkle in your eye and a swing in your step. And that happiness may well translate into warmth towards those beneficial political masters who graciously granted the opportunity.

But anyone making a swift decision could regret it. Even Mr Webb was forced to admit last month that the best decision for many people could be to wait and see what “innovative” new products the pension companies can come up with in the coming months to help them take advantage of the new freedoms.

Another reader asks: “When will the insurers have the system support to enable all this to happen and – more importantly – can we trust them?”

I’m looking forward to seeing Mr Webb’s response to that, but in the meantime please keep your questions coming.