This support needs to be wide in scope to provide guidance on all pensions related matters and all ‘retirement income’ options, not just pensions, with appropriate funding, created from an industry levy, to support this activity.
Richard Rowney, Managing Director of Life and Pensions at LV=, said: “The low take up of advice is leading to a “mis-buying” crisis where people are making important financial decisions without adequate support. It’s essential that all consumers are able to access affordable, regulated advice but when people can’t, or don’t, take advice we believe guidance should be compulsory. This would further inform retirees about their options and help them make the most of their money, so we fully support the introduction of a merged, one-shop money and pensions guidance body.
“Making guidance mandatory, and increasing accessibility of advice, would be beneficial to all, as not only would individuals be better off but they would be less likely to rely on State support in retirement and would contribute more to the UK economy.”
LV= research has found:
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As an estimate, nearly half a million[1] people a year retire each year without taking financial advice.
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Of those within five years of retirement, four in ten (41%) don’t plan to take any advice or guidance at all.
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Only one in five (21%) will takeregulated financial advice, while just 14% will use Pension Wise – a similar percentage to those who will speak to friends and family (13%) or their existing pension provider (16%).
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Nearly a quarter (22%) said they wouldn’t take advice because free guidance is sufficient, highlighting the need for quality guidance2
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Yet typically someone who takes advice and shops around for an annuity receives a 23% increase in retirement income
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