Retirees need better financial advice

The UK government should create a ‘National Wealth Service’ and make “fundamental changes” to pension advice services, according to a leading pensions expert.

Dr Ros Altmann’s report, Flexibility in Retirement – Planning for Change, reveals that while 24% of UK workers say they will start or increase pension contributions following the Budget changes, 41% do not understand what the changes mean for retirement saving.

The research conducted by Dr Altmann found that:

  • 20% of adults are confident they are saving enough for retirement
  • 71% are happy to work past the current State Pension age
  • 38% of companies are concerned about the increase in older workers in the workplace
  • 22% think an increase in older workers will lead to higher costs.

Dr Altmann is calling for a financial advice “revolution” to ensure people make the most of the new freedoms announced in the Budget.

She suggests that the government should launch a National Retirement Guidance Network in April 2015 to help people about to retire make the most of their pension savings. The network would offer independent retirement guidance.

This would be expanded into a National Wealth Service and integrated into workplace auto-enrolment providing “financial wealth-checks” for all savers.

She also calls for:

  • rules forcing non-advice services to disclose charges
  • the introduction of a low-cost specialist advisory service
  • an increase in the annual £150 tax allowance for firms that provide advice in the workplace.

Dr Altmann said:

“To make the new freedoms work for individuals, a revolution in the provision of financial education, information and advice is required.

“These regulatory changes could have a dramatic impact on the advice industry and provide greater protection for customers who would otherwise not have access to the first-class service of an adviser.”

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