Roadblocks on the route to pensions freedom

Pensions freedom doesn't seem to be going quite as smoothly as some hoped it would. The headline on last Saturday's Daily Telegraph said it all: "millions more in pensions rip off".

It turns out that while a good number of the over-55s interpreted the new legislation as allowing them simply to use their pension as a bank account withdrawing money at will, ATM-style the big pension providers see it rather differently. So some "three million people are blocked from using their funds like bank accounts" and around two million "cannot cash in their funds at all" due to red tape and expense.

That's not all. Other firms are charging high exit charges (up to 20% for 350,000 people); insisting that everyone takes their tax free 25% up front (although the legislation allows it to be spread out); and charging whopping fees to anyone wanting to use "the most advanced form of the freedoms" flexi-drawdown.

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No one is much impressed. Iain Duncan Smith, the secretary of state for work and pensions, has taken to the papers to promise to "make sure pensions freedom works" for everyone, regardless of which provider they have saved with. Jeff Prestridge, writing in the Daily Mail, is demanding that "the bosses of these dilatory companies should be told in no uncertain terms that unless they start playing ball soon, they will face massive regulatory fines, preferably applied personally as well as at the corporate level".

Not everyone is finding getting their hands on their cash tricky: this week it was announced that 60,000 investors have already withdrawn atotal of £1bn from their pots (that's an average of £17,000 each). But what do you do if you are? First you might want to just wait a bit. The government has not actually required all providers to update their systems to offer flexible cash withdrawal (and they have only had 12 months to get ready for the changes).

But everyone has the right to transfer their cash to a more cooperative provider if they like. And while the cost of doing that looks too high at the moment, there's a huge amount of pressure on pensions firms and trustees to embrace freedoms. And there is the looming threat of a cap on charges for transfers and for drawdown products if they look like they will keep overcharging. So they should succumb in due course.

If that doesn't work for you, it is worth calling Pension Wise, a free guidance service set up to help people understand their options (0300-330 1001). Failing that, you can lodge a complaint with your pension provider, says the FT. If it hasn't responded in eight weeks you can then pass your complaint to the Financial Ombudsman Service.