Too few receiving the right financial advice
The Work and Pensions Select Committee have been reviewing the ‘pension freedoms’ reforms brought in by the Government in April 2015 and have identified concerns in relation to the advice that people receive when making crucial decisions about their pension pots – or even decisions being made without seeking any advice at all. This comes in spite of free independent advice being available from the Government’s Pension Wise, Money Advice Service (MAS) and the Pensions Advisory Service (TPAS).
The Association of British Insurers presented evidence to the Select Committee which suggested that just six per cent of UK adults had received regulated financial advice at the appropriate time. The lack of clear advice, combined with confusion about who to trust for independent advice (in light of cold calling and pension scams), has contributed to individuals not seeking the advice they require to make properly informed investment decisions.
The Financial Guidance and Claims Bill currently seeking approval in Parliament will create a single financial guidance body that will issue money and pensions advice from the Government. The Bill will also introduce more stringent regulations in relation to unsolicited direct marketing of pensions advice.
It is hoped that the introduction of the new regulations will create an environment where individuals can make more informed decisions leading to a more comfortable life in retirement.
