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LEBC to fight for advice allowance take-up

LEBC to fight for advice allowance take-up

National advice firm LEBC is to urge pension providers to facilitate the government’s £500 advice allowance to ensure access to advice is widened to a broader group of people.

The group’s director of public policy, Kay Ingram, said her firm would approach providers and will not take ‘no’ for an answer.

The government's pension advice allowance was launched in April and allows savers to pay for pension advice by accessing three installments of £500 each of their retirement savings.

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HM Treasury has said it was the responsibility of the providers to market the allowance, but by May none of those asked by FTAdviser had any firm plans to do so, many citing a lack of demand.

Ms Ingram said: "The pension advice allowance introduced by former pensions minister Richard Harrington can help to fund advice. 

 "LEBC will be asking pension providers to facilitate this to widen access to advice. Excuses that there is no demand will not be acceptable."

Ms Ingram said giving people access to advice was the only way to improve the UK's savings ratio and empower consumers to plan for their future.

She said 2017 may be remembered as the year in which the savings ratio fell to an all time low, while consumer debt remained stubbornly high after an Office for National Statistics survey in June found the savings ratio had fallen to 1.7 per cent. 

"Most commentators agree that it needs to increase if a large part of the population are to avoid poverty in old age," she said.

"Giving consumers more information and lots of numbers will only help if it is accompanied by access to advice which puts the numbers in context of the individual's circumstances."

Ms Ingram said guidance, as currently offered by the government's free service Pension Wise, was good for some financial matters, such as building up short-term savings.

But for longer term planning Ms Ingram said guidance was limited as it cannot execute a course of action for the consumer - it cannot give a personal recommendation.

"Asking consumers who simply want to build up a rainy day fund to complete a full advice process is disproportionate and a deterrent to saving. 

"For longer term more fundamental decisions, such as house purchase, retirement planning, care fees provision and education funding, a personal recommendation will always be preferable," she said.

She added: "Cutting the cost of advice so that access to it can be widened and signposting consumers to the appropriate channel for advice is the challenge in 2018 for the advice community and the guidance bodies."