Free retirement guidance should be independent – England
There is widespread support for government proposals to provide free retirement guidance but more than half of over-55s think it should come from an independent, consumer body.
Chancellor George Osborne announced plans at the 2014 Budget to guarantee all retirees with a defined contribution pension “free, impartial, face-to-face advice”.
Retirement “advice”, which is regulated, was quickly replaced with “guidance”, which is unregulated.
A survey by insurance and retirement specialist LV= found that 80% of respondents supported the proposals, due to take effect from April 2015.
However, the responses revealed a lack of faith in pension providers to give impartial, trustworthy guidance.
The survey of more than 2,000 people aged over 55 found:
- 78% support free pension savings guidance for those approaching retirement
- 52% would accept guidance from an independent, government-backed consumer body
- 48% would act on guidance provided by an independent body
- only 17% would choose a guidance session offered by their existing pension provider instead
- just 19% would act on guidance provided to them by their pension provider.
The group chief executive of Friends Life, Andy Briggs, has called for the guidance to be delivered by an “independent central utility demonstrating true impartiality for the consumer.”
Managing director of LV= Life and Pensions, Richard Rowney, said the research findings:
“…support the widely held view that, for the guidance to be a success, those approaching retirement need to have trust in the process and the organisation offering the service. It is clear from our research that, in order for this to be achieved, the sessions should be provided by an independent body.”
In May, the Treasury’s director general of financial services Charles Roxburgh said the government was working out what the guidance would look like and how it would be delivered. He said:
“If we have to do it all face-to-face then there is a huge supply problem. It is not easy and we recognise that something may have to give in order to make the equation work.
“Because it is not advice I do think it is more susceptible to technology-based tools. We have a lot of guidance to deliver so we need flexibility about how it is to be delivered.”
Contact us to discuss your retirement planning and income options.