The pensions technical director of MGM Advantage warned that many people were making poor retirement decisions, such as paying too much tax, because they are not maximising their tax allowance, or investing in poor value solutions without seeking any financial advice.
Mr Tully said he was “extremely concerned” that so many people do not value financial advice and make decisions about how to best finance their retirement by themselves.
He said: “We need to think about the lessons learned from auto-enrolment, as there we have a form of soft compulsion to save. Perhaps similar prompts to use the guidance service should be considered.”
His comments followed recent research conducted by the company that showed that two in five of all UK adults aged 55 and above were unaware of retirement income options available. Of these just under a third said they would not value financial advice when it came to retirement, while 36 per cent admitted that they did not know what an IFA was.
Mr Tully added: “The guidance guarantee is a crucial piece of the Budget jigsaw. Just as your choices at retirement increase, so those decisions become more complex. The need for proper financial advice is even more important after the Budget proposals.”
Pete Matthew, managing director at Cornwall-based Jacksons Wealth said: “I am convinced that financial literacy is a key component in securing UK population financial liberty.
“Improving financial awareness should be done in multiple ways through workplace, schools and the industry. It will be a big step forward to educate and encourage people to realise the value of financial advice.”