Pension providers, advisers and government guidance bodies must come together to promote the pension advice allowance for the benefit of clients, experts have said.
Pete Glancy, head of policy at Scottish Widows was appearing on the FTAdviser Podcast, alongside Mike Lacey, partner at financial adviser firm Bowman Pension Consulting, to discuss the advice allowance and why its take-up has been low.
The policy allows defined contribution pension scheme members to withdraw £500 a year tax-free from their pot, up to three times in their life to pay for financial advice.
But many members of the public are unaware that this initiative exists and many pension providers don’t provide this service to their members.
Scottish Widows is one of the few providers that offer this service although it has admitted that take-up is low.
Mr Glancy said the pensions industry needs to step up its efforts to make the public aware of this beneficial service while also promoting the value of advice.
He said: “People aren't aware that the advice allowance even exists, so product providers, the adviser community and the new Money and Pensions Service all have a role to play in making sure the public know that these kind of facilities exist and how they can be beneficial.
“But I also think that we need to do a bit of marketing around the value of advice collectively. Not everyone understands the value of advice and why people should speak to an adviser.”
Mr Lacey agreed that the adviser community should get involved with promoting this service.
He said: “I think the ability to have this amount of money going towards advice should be promoted in a more upfront manner than simply hidden away in a large factsheet or wake up packs, which isn’t going to people that aren't financially sophisticated.
“The whole concept of the advice allowance should be shouted from the rooftop.”
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