Aegon will only give customers full freedom over their pension funds without paying for financial advice from April 2016, The Telegraph has reported.
This means that those customers who do not take financial advice either have to withdraw their entire pension pot and be hit with a large tax bill, undergo a potentially costly transfer to a rival provider, or use their entire funds to purchase an annuity.
The UK pension freedoms, which came into force in April, were supposed to give over-55s access to their pension savings.
An Aegon spokesperson suggested the company would offer the full flexibilities when it was confident it would be able to meet customer needs, media reports revealed.
Complex
“We offer the full range of pension freedoms including cash lump sums and flexi-access drawdown. We refer clients to advisers for complex products like income drawdown,” a spokesperson for the company said in a statement.
“It’s important that customers receive the right advice as drawdown can be complex and requires customers to make decisions about investments, how much income to take and how long their savings might need to last.”
In June, Aviva-owned Friends Life apologised for blocking customers from withdrawing some of their pension funds. It said it would offer partial withdrawals in “due course”.
The Association of British Insurers (ABI) since urged the UK Government to remove the need for savers with guaranteed annuity rates to pay for advice.
