Philip Brown, Head of Policy at LV=, said: “In April 2015, the pension reforms revolutionised the pensions market by giving consumers flexibility over their retirement options. However these reforms also created greater complexity and even two years on it is apparent consumers still don’t have the necessary support to make the right decisions at retirement with the latest Financial Conduct Authority data and our research showing worryingly low numbers taking advice.
“In order for the new pensions market to work for consumers, they must be engaged and helped to make an informed decision when choosing what to do with their savings. The new single financial guidance body is a golden opportunity to tackle the issue of people retiring without support. We believe the body should be required to focus on achieving quality outcomes from guidance, and report on the number of referrals to regulated advice, which will help ensure consumers have the help they need to make important financial decisions.”
“In order for the new pensions market to work for consumers, they must be engaged and helped to make an informed decision when choosing what to do with their savings. The new single financial guidance body is a golden opportunity to tackle the issue of people retiring without support. We believe the body should be required to focus on achieving quality outcomes from guidance, and report on the number of referrals to regulated advice, which will help ensure consumers have the help they need to make important financial decisions.”
Recent LV= research* has found:
- Six in ten (61%) of those approaching retirement don’t plan on using a professional adviser
- Some of the main reasons people cite for not taking advice are cost, with only one in five (22%) thinking it is good value for money, lack of trust (19%) and the opinion that they can make the right decisions based on their own research (23%)
- Half (52%) think they can make the right decisions without advice
- LV=’s Retirement Wizard service is helping to make advice more accessible and affordable to the mass market by offering advice to those that don't normally make use of advisers. It offers consumers regulated online, retirement advice for £199.
- The latest retirement income data from the Financial Conduct Authority found that just 33% of customers who bought an annuity used a financial adviser, and 65% of those who went into income drawdown.
*Data from research carried out by Opinium for LV= between 16 to 21 February 2017, 1,008 sample size.