Free “Guidance” at Retirement needs to be independent!

Government proposals to provide free retirement guidance have widespread support 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 may be unregulated, subject to the final rules.

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 if given the choice
• just 19% would act on guidance provided to them by their pension provider.

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.”