Pensions advice revolution needed now: Altmann

Writing in a 53-page report, Flexibility in Retirement, independent pensions expert Ms Altmann said: “There is a massive opportunity to be grasped by financial advisers and the industry.”

She said rules forcing “non-advice” services to disclose charges in the same way as advisers must be made mandatory, with no hidden commission.

In addition, Ms Altmann argued that a system of specialist lower-cost advice for people at retirement should be introduced, with the government increasing the current £150-a-year tax allowance for employers who provide advice in the workplace.

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National pensions guidance should also be incorporated into auto-enrolment to encourage people to “plan for retirement, she said, rather than only planning at retirement” and a “national retirement guidance network” should be launched from April 2015 focusing on those about to retire, which should then expand into a wider “national wealth service” thereafter.

Ms Altmann said: “These regulatory changes could provide greater protection for customers who would otherwise not have access to the first-class service of an adviser.”

Key findings

41% of working adults admit they do not understand retirement saving following the Budget changes

Just 20% of all adults are confident they are saving enough

71% of adults would be happy to work past the state pension age

An extra year of full-time work and a further two years’ part-time work could boost pension funds by 11%

The report also suggested the new pension freedoms from April 2015 are likely to lead to a “product innovation revolution”.

New products could include lifetime pension accounts, pension growth funds maturing into pension income funds, alternative types of annuities and fixed-term retirement bonds that include advanced life deferred annuities, the report said.

Dominic Grinstead, UK managing director of the report’s sponsor, MetLife Europe, said: “The UK has the opportunity to create a world-leading retirement and pensions system and this report provides a blueprint for how to achieve that.”

Adviser view

Mike Pendergast, owner of Cheshire-based Zen Financial Services, said: “There is certainly a need for more pension advice and access to it much earlier in people’s lives. We see so many people in their 40s and 50s wanting to start a pension. While every little helps, it is just too late for most people by that stage.”