Separating the advice from the firms that are flogging pension products is essential
Personal finance editor
Tuesday 22 July 2014
The Chancellor hopes his announcement yesterday will lead to a world where retiring people make informed decisions about their pension choices.
To help that happen, he’s set a levy on financial firms to pay for free advice for those who need it.
Separating the advice from the firms that are flogging pension products is essential to ensure that we never again endure the years of people being gently eased into their pension company’s overly expensive annuity.
But with the new flexible annuities remaining an important option, it’s essential that the guidance given does actually help people understand their options and make decisions about their financial future.
That’s why the most important part of yesterday’s stream of announcements is probably that the City watchdog will police the organisations that are giving advice.
With the previously announced “free face-to-face” advice mentioned in the Budget turning into “a range of ways, including web-based and phone-based”, it’s essential to ensure that people receive the right advice.
With 18 million people’s future at stake, the Financial Conduct Authority has its work cut out ensuring that the likes of the Money Advice Service and Pensions Advisory Service can step up to the challenge.
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