A mandatory, independent gateway should be implemented eventually for those seeking to access all of their pensions, without the benefit of regulated advice, retirement adviser LEBC has said.
In the interim, the introduction of a 30 day cooling off period for non advice individuals seeking full access to funds of £30,000 or more should be put in place, and there should be greater adoption of 'bionic advice' among advisory firms to expand the capacity of advice available to the growing number of retirees.
The national adviser said this could help consumers understand all of their options and the value of shopping around, rather than focusing on how to access funds and only talking to their existing provider.
Over 70 per cent of its advised clients qualify for enhanced income once their lifestyle and health are evaluated. “Product providers are currently spending time and money on ’wake up‘ packs which are expensive and ineffective in promoting competition and choice,” LEBC’s director of public policy Kay Ingram stated.
LEBC has advised over 25,000 retirees per year, following the introduction of pension freedoms. Its service has now advised on over £3.8bn of pension assets.
Ingram added: “Our experience to date is that the majority of advised clients are using the pension freedoms responsibly. They are benefitting from the flexibility to design their retirement income around their personal circumstances.
“Employers and trustees of schemes are increasingly using our Bionic Advice service to empower their members to better prepare for retirement. We believe that expanding that bionic advice availability coupled to work place education will be vital to filling the advice gap. We welcome the increase in the employer sponsored advice allowance to £500 per year and would urge pension providers to also implement the separate £1,500 pensions advice allowance introduced by the government to widen access to advice.”
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