Andy Haldane was quoted this week as saying: “I consider myself moderately financially literate - yet I confess to not being able to make the remotest sense of pensions.
"Conversations with countless experts and independent financial advisers have confirmed for me only one thing – that they have no clue either".
But advisers aren’t to blame for the legislation, Danny Cox, a Chartered Financial Planner at Hargreaves Lansdown, said.
He told Financial Planning Today: “There are elements of pension rules, particularly in the way they interact with each other, which are exceptionally complicated and are little short of a dog’s breakfast. But advisers don’t make the rules.
“Advisers are part of the solution to help consumers make sense of the pension system and make good choices. It is up to those in responsible and public positions to use their weight of influence to help effect change, simplify the system and encourage more people to save for their future.”
Following Mr Haldane’s comments, Hargreaves Lansdown called for pensions to be made simpler with these five measures:
1. Scrap the Lifetime Allowance
2. Scrap the Annual Allowance Taper
3. Introduce a 7 day pension transfer guarantee
4. Merge the FCA and the Pensions Regulator
5. Simplify PAYE rules around drawdown income payments
The economist’s criticism of pensions should also act as a “stark warning to those putting the finishing touches to the LISA rules”, Mr Cox added.
He said: “The success of LISA will directly depend upon its simplicity. Investors don’t appreciate being forced to navigate their way through an intricate maze of conflicting rules.
“Given the numbers of savers taking up Help to Buy and the considerable name awareness, LISA should be extremely attractive to savers and investors but only if we keep it simple.
“The Treasury should also take the opportunity to simplify the workings and variants of the ISA product suite during this design process.”