Government urged to make retirement guidance compulsory

In its response to the HM Treasury public financial guidance review consultation, LV= said that the support needs to be wide in scope to provide guidance on all pensions related matters and all ‘retirement income’ options, not just pensions. It is calling for appropriate funding, created from an industry levy, to support this activity.

Recent LV= research found that nearly half a million people a year retire each year without taking financial advice, yet someone who takes advice and shops around for an annuity receives a 23% increase in retirement income on average.

Richard Rowney, Managing Director of Life and Pensions at LV=, said: “The low take up of advice is leading to a “mis-buying” crisis where people are making important financial decisions without adequate support. It’s essential that all consumers are able to access affordable, regulated advice but when people can’t, or don’t, take advice we believe guidance should be compulsory. This would further inform retirees about their options and help them make the most of their money, so we fully support the introduction of a merged, one-shop money and pensions guidance body.

“Making guidance mandatory, and increasing accessibility of advice, would be beneficial to all, as not only would individuals be better off but they would be less likely to rely on State support in retirement and would contribute more to the UK economy.”