Pensions  

IFA offers guidance for under a fiver

IFA offers guidance for under a fiver

Specialist pensions and investment firm Money Minders is offering a retirement options report for less than £5 due to concerns from those approaching retirement.

It comes after advice firm Charles Derby faced a backlash following its decision to offer its pensions review service, usually worth £295, for £12.

Research commissioned by Money Minder found 49 per cent of people approaching retirement feared their pension savings would not last their lifetime.

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The firm also surveyed 1,000 adults aged between 55 and 67 who hadn’t yet accessed their pensions saving and were not in a final salary or defined benefit (DB) scheme and found there was significant worry about retirement funds.

Because of this Money Minder decided to offer its Retirement Options Report for £4.90, rather than the usual price of £25.

Ray Black, director of Money Minder, said there was a problematic pensions advice gap among people with pensions savings.

He said: "There's an obvious pensions knowledge gap among the UK's pre-retired population and this isn't going to be helped by the fact that most do not want to pay for advice.

"Our research found that less than a quarter intend to consult an independent financial adviser, highlighting the ‘advice gap' that exists for people who have pensions savings yet have very little guidance on how to make highly important decisions about their future retirement income."

Scheme members who are looking at retirement options can access this information for free via The Pensions Advisory Service.

Critics of Charles Derby’s decision said it was unlikely the advice could be thorough if it was being offered at such a low price.

Paid-for advice services have also led to questions about how well the government is doing in promoting its free Pension Wise service.

Jonothon McColgan, director and financial planner at Combined Financial Strategies, said: "For the price they are charging at the moment, it is hard to imagine that they’ll be able to give scheme members specifics.

"If people are paying for what is essentially a rehash of the government's Pensions Wise service, then questions need to be asked about how well the regulator and the government is doing to promote its service to the public."

rosie.quigley@ft.com