“We must ultimately realise take up of the guidance guarantee will be low and retirees will be contacting providers of retirement products be that annuity, drawdown or uncrystallised lump sums directly.
“As such, it is imperative for the Financial Conduct Authority to put in place appropriate regulatory controls to ensure individuals looking to take advantage of the new pension freedoms receive the relevant information and continue to shop around for the most appropriate retirement option.”
The CII commissioned its survey during July, contracting more than 1,000 UK consumers within five years of retirement, who had defined contribution pension pots and other assets each of less than £100,000 and who did not have a financial adviser.
The study found that relevant personalisation is an expectation for 65 per cent of respondents planning to use guidance. One in five expect a specific recommendation based on personal circumstances and 45 per cent expect a tailored list of options for someone in their circumstances.
Whilst it remains unclear exactly how guaranteed guidance will work, the CII found that 57 per cent of people would value receiving personalised face-to-face advice. Almost half of those surveyed (48 per cent) expressed concerns about how they will cope financially in retirement.
The research also showed that 97 per cent stressed the importance of impartiality and expertise of the organisation and staff providing the scheme.
The survey also revealed that a third would see guidance as an enabler, helping consumers to go on and make their own informed decisions, whilst almost a quarter (24 per cent) would consider taking further professional advice.
Laurence Baxter, head of policy and research at the CII, said: “What we have found is that 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.”
Mark Stopard, head of product development at Partnership commented that the overwhelming message from the report is that in order for guidance to be a success, it needs to be tailored, relevant and personalised.
“The new pension regime not only provides additional freedoms but puts far more responsibility on individuals to make the right choices for their circumstances. Done right, the guidance guarantee can facilitate this but people need to be motivated to engage and will only do so if they feel that they will personally gain something from the experience.”