LV calls on government to make financial guidance at retirement age compulsory
One financial services company has today called on government to make the provision of guidance to those reaching retirement compulsory.
Revealing how it had responded to a Treasury consultation, LV warned that the introduction of the pension freedoms rules had made it increasingly difficult for people to assess how to handle their money during their retirement.
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"The low take up of advice is leading to a mis-buying crisis where people are making important financial decisions without adequate support," said Richard Rowney, managing director of life and pensions at LV. "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."
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Previous research by LV has found that roughly half a million people retire every year having taken no financial advice, even those who do take advice and shop around for a good deal on their annuity typically receive a 23 per cent bump in their retirement income.
The pensions freedoms rules, which came into force last April, allow those who are aged over 55 to dip into their pension pot without first purchasing an annuity.
On a similar note, research published by Citizens Advice last week discovered that seven out of ten people who had accessed their pension savings since the rule change took place did not compared different retirement products before doing so.
However, figures released in April by the Pensions Advisory Service were a bit more optimistic, revealing that it had received a 71 per cent increase in people seeking guidance since the pension freedoms came in.