ALL OF Britain’s savers are to be given free and impartial advice about pensions investments, the government said yesterday, though it made a key change to the body providing the information.
The advice will now be provided by organisations including the Citizens Advice Bureau, not pension providers themselves, as originally proposed by George Osborne in his Budget statement earlier this year.
The changes follow a consultation into the way those reaching retirement should be best advised. The service will be paid for by a levy on the sector and overseen by the Treasury, not regulated by the Financial Conduct Authority.
The change has been widely welcomed by pension providers, however some have called for the government to go further and promise advice throughout people’s working lives.
“Giving responsibility of delivering the guidance guarantee to independent organisations is sensible,” said Simon Foster, head of corporate life and pensions at Zurich UK Life.
“But the changes introduced by the Budget make the availability of information around saving even more important and we believe that guidance should be provided throughout people’s working lives, not just at retirement, if savers are helped to make the right decisions.
“Employers willing to offer workers advice should be given a safe harbour to prevent them from being sued decades after having provided guidance. In order to ensure innovation in this space, we believe the FCA should also work with advice providers.”
The National Association of Pension Funds warned that time is running out to put the finishing touches on the scheme, before changes to annuities are rolled out next April.
The news comes as the Financial Conduct Authority raised concerns over poor pensions transfer advice. The FCA also cautioned that some chief executives of self-invested personal pensions (SIPPs) did not have adequate knowledge and expertise to assess high-risk investments.