A “radical reshaping” of financial advice firms used by pension providers for long-term investment strategies will benefit millions of savers and “boost” the UK’s £1.6trn retirement assets, plans published by government unveiled today.

According to ministers, opening up the market for financial advice services used by pension schemes will allow trustees to get better value for the money, boost members’ retirement funds and reduce employers’ shortfalls.

An investigation into investment strategy advice accessed by pension schemes from the Competition and Markets Authority (CMA) revealed that trustees were often denied clear information which would support them when weighing up their options.

Following the probe, the government is now acting to; improve competition in financial advice services used by trustees of both DB and DC pension schemes; ensure better disclosure of charges and performance; encourage closer trustee engagement; and enable more effective monitoring of compliance by The Pensions Regulator (TPR).

Welcoming the CMA’s findings, the minister for pensions and financial inclusion Guy Opperman said: “Changes we are proposing will have a positive impact on millions of people’s pension pots.

“The market sometimes restricts trustees’ ability to find the best value for money, meaning that defined benefit schemes are less affordable and more difficult to fund while defined contribution schemes face higher costs and reduced returns for members.

“We want trustees to be better equipped and engaged when accessing services which have a huge influence on decisions affecting how much their members will have to live on in retirement.”

The Department for Work and Pensions plans to consult on proposals later this year.

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