LV= wants to see the government incentivising the take up of advice by offering free advice for the most vulnerable with the smallest pension pots, and making it mandatory to use Pension Wise for those who don’t take advice, so no one is in a position where they are without support. To enable Government to offer free advice, LV= has offered to work with Government to offer pensions advice for free, using its own ‘Retirement Wizard’.
It also believes the government should provide consumers with a voucher to pay towards advice at the point of retirement as six in ten (63%) people would be more likely to use an adviser if they received a voucher, increasing to three-quarters (74%) of those with a stakeholder pension.
LV= believes the low take up of advice is leading to a “mis-buying” crisis. Its research found that only a third (34%) of people aged over 55 plan to use Pension Wise when they retire and only one in five (22%) say they’ll take independent financial advice.
This means that around half a million (480,000) people will retire each year without taking regulated advice. Statistics show that people who shop around for an annuity are 23% better off than those who don’t.
Richard Rowney, Managing Director of Life and Pensions at LV= said:
“Too few people get the advice they need at the point of retirement and many don’t shop around, meaning they could be missing out. We need bold action from Government to create a system where all consumers – no matter how much money they have saved – are able to access affordable, regulated advice to help them make the most of their money. By improving the take up of advice, pensions will work harder at retirement, leaving individuals better off and less likely to rely on State support.”
