Consumers will use the government’s guaranteed guidance scheme to help with retirement planning after April 2015, evidence from the Chartered Insurance Institute has suggested.
Laurence Baxter, head of policy and research for the CII, said that people, especially those with smaller pots, will choose the new scheme as their first port of call when the pensions liberation measures come into force.
The study was conducted among 1,000 people in defined contribution schemes, within five years of retirement, with pension pots worth less than £10,000 and no financial adviser.
Mr Baxter said: “We undertook this research to help establish what would really meet consumers’ needs and help them make informed decisions.
“Almost half of those nearing retirement lack confidence in their own ability to make informed decisions regarding their finances, and for most people expertise and impartiality will be key for those delivering guidance.”
Mr Baxter said there was a clear need for those with smaller pension pots to be made aware of the impending changes through a campaign to publicise the benefits of using the guaranteed guidance service.
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Nearly all respondents (97 per cent) stressed the importance of impartiality and expertise Two-thirds said a degree of personalisation was necessary to make the scheme worthwhile Guaranteed guidance was viewed as an enabler by a third of respondents, helping consumers to go on to make their own informed decisions Nearly 25 per cent would consider taking further professional advice Source: CII |
Mark Stopard, head of product development for provider Partnership, said: “The overwhelming message from the CII report appears to be that for guidance to be a success, it needs to be tailored, relevant and personalised.
“Whether someone chooses to access it face-to-face, via a telephone service or online questionnaire, they want to feel that it provides them with information they can use to make choices.”
Adviser view
David Brooks, technical director for London-based Broadstone Pensions and Investments, said: “I am surprised that the figure for those wanting more face-to-face meetings is so high. A lot of people actually feel intimidated by such meetings, and prefer phone contact.
“Of course people will want this to provide the next step or more personalised advice to make it worthwhile. But providing that comes with risk and cost for the government. You can imagine the problems if people act on the advice and it turns out to be wrong.”
