Pension savers could receive advice vouchers to encourage a greater uptake of advice prior to retirement, Royal London director of policy Steve Webb has proposed.
Speaking at the House of Commons Work and Pensions Committee meeting on Wednesday 1 November, the former Pensions Minister suggested advice vouchers for employees could be a way to get savers “through the door” to take advice.
“Adivce is valuable, advice is generally well received by those who take it, but people don’t value it, people don’t appreciate it. And so we need to get people through the door of advice, and I think we could launch a pilot of advice vouchers,” Webb said.
Webb explained that savers could receive their first advice voucher for free, in order to have an initial consultation and then enable consumers to assess its worth and whether they would like to pay for more sessions.
“If they don’t want it, that’s fine, if they realise it’s valuable to them, we’ve got them through the door,” Webb explained.
When asked who would run such an initiative, Webb noted that he believes it should be run by both the government and industry together.
Also on the panel in the meeting, Nest chairman Otto Thoresen supported the need for sustained pensions advice at more than one point in an individual’s life. “Advice advice should be attained on many points along the pension savings and transfer journey,” he said.
ABI assistant director, head of retirement policy Rob Yuille agreed: “Better access to advice and guidance is key, but it needs to continue throughout retirement.”
Moreover, Webb echoed the view that advice needs to be encouraged much earlier than retirement, as it may be too late when reaching retirement age. “Pointing to guidance needs to be earlier when people haven’t made their mind up and the guidance can help shape it. Encouraging Pension Wise appointments prior to consumers deciding on cash withdrawal options, for example.
