By Andrew Tully

Many changes will be taking place in the world of pensions as we move towards the end of 2019 and into 2020. Ongoing regulatory developments seem inevitable, but nonetheless it is important for firms to be aware of what changes are due and what they will mean to clients.

Wake-up packs

New requirements to provide wake-up packs to clients were introduced on 1 November. Traditionally, these packs were issued between four and six months before the selected pension age, but there is recognition this no longer works in the world of pension freedoms.

Now providers will contact your clients much earlier, with the initial communication starting at age 50. Thereafter, packs will need to be sent at least every five years until the client has fully crystallised their pot, and could continue being sent beyond age 75.

However, there are also certain ‘action’ triggers that mean packs could be sent on a much more regular basis, with some clients receiving information annually.

The new-style packs contain risk warnings and these could conflict with the advice that has been given. For example, if an adviser recommends a client below their selected retirement age access their funds, there has to be a prominent risk warning within their wake-up packs that says accessing funds may not be the best option.

This may lead the client to go back to the adviser to check the recommended course of action.

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