The government should give people aged 55 and over a £250 voucher to go towards an advice session, Richard Rowney, managing director of life and pensions at LV=, has stated.
He believes that the government should act, given that half a million people a year were entering a pension without getting any financial advice.
“We’re calling for the chancellor in his Budget statement to give people aged 55 an advice voucher. We believe £250 would go a long way if not all the way towards providing this advice”, he said.
Mr Rowney told BBC Radio 4’s The Today programme: “This is the biggest financial decision anyone will take in their life. We believe you need to combine technology including robo-advice.”
He warned that after the mis-selling crisis, Britain could see a mis-buying crisis if the lack of affordable, accessible and regulated pension advice isn’t resolved.
In its consultation on public financial guidance, published in October, HM Treasury stated that it was considering introducing a voucher system – like a form of financial legal aid – to help consumers pay for guidance.
Last week, former pensions minister Steve Webb reiterated his support for some form of advice voucher system to replace the Pension Wise at-retirement guidance service.
Now director of policy at Royal London, he told FTAdviser: “A voucher service is interesting and could be explored. Pension Wise could be substantially streamlined and having done that, it throws up money for something like vouchers; that would be worth experimenting with.”
However, advisers believed it would not be enough. Danny Cox, a Chartered financial planner at Hargreaves Lansdown, commented that Mr Rowney’s £250 suggestion “wouldn’t get very close to covering the cost of at retirement advice”.
Ray Boulger, senior technical manager at London-based John Charcol, agreed that the £250 figure would not be enough.
“There is some merit in looking at ways for the government to incentivise people to get financial advice, but it needs to be more than that.
“The government could reallocate the money it is spending on marketing the Money Advice Service. The only way the government would consider doing this is if it could reallocate money from elsewhere. An amount more than £500 would be suitable.”
