The research which seeks the views of some of the UK’s leading pension and annuity experts found that the majority (92%) believed free guidance for DC pensions needs to be supplemented by other forms of guidance (online, via telephone, and face-to-face). 62% agreed, and 24% strongly agreed, that better online tools are also needed to guide members in regards to their benefits at retirement.
In particular, members with funds of less than £100k will find it hard to access the help they need, as IFAs are more interested in clients with larger assets post-RDR, according to over half (58%) of the respondents.
In addition, 58% also agreed, or strongly agreed, that the second line of defence will do little to ensure that individuals take the advice they need, and nearly a third (32%) were undecided about its effectiveness.
56% believe that the cost of advice on transfers from DB pensions has increased owing to the need for inflated professional indemnity cover. 72% believe age 55 has become the trigger point for individuals to begin to plan for the format of their income in retirement and more people aged 55 and over are engaging in this than previously.
Nigel Pearce, Life and Pensions Director, Equiniti, said: “Ultimately, members will only come to understand the new flexibilities and how they are suited to their own personal circumstances if they receive more information as to how the system works both in a language that they can understand and a format that works for them. The responsibility for providing this additional guidance will inevitably fall on schemes and providers.”
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