Which? finds people don’t trust pension providers to offer impartial guidance, underlining the need for the Government’s guarantee of one-to-one guidance to be genuinely impartial, and not delivered by the industry.
A new Which? survey finds 65% of people don’t trust pension providers to offer impartial guidance on their retirement options, which increases to three-quarters (76%) of those aged 55-64. Consumers are most likely to trust guidance delivered by an independent body such as The Pensions Advisory Service (63%).
The findings come as the Government today closes its consultation on the new pension reforms announced in the Budget. Which? welcomes the plans to give everyone free and impartial guidance on their financial choices at the point of retirement, as a separate survey of Which? members finds that the guidance will be key to making the reforms work.
People welcome that the Government’s reforms offer greater flexibility and choice, with seven in ten (72%) members saying people should be able to do what they like with their pension savings and six in ten (61%) saying that removing the need to buy an annuity is generally a good thing.
However, many aren’t confident about what to do with their pension savings. Nearly half (45%) are worried they will run out of money by leaving their pension invested and taking money out each year, and a third (32%) aren’t confident about how much they should take out each year to avoid this.
Of those we surveyed who aren’t yet retired, three-quarters (76%) said they will need advice about what to do with their pension when they retire, and a quarter (26%) said they don’t know where to get this advice.
This makes it crucial that any guidance given to people approaching retirement is not offered by pension providers and is high quality, personalised and one-to-one. It should take into account all of someone’s savings, investments and pensions, give people clear information on all their options across the market and direct them to other sources of advice, for example regulated advice or debt advice, if necessary.
Which? executive director, Richard Lloyd, said: “The Government’s pension reforms could help people boost their retirement income by thousands of pounds. But with many unsure about how to get the most from their pension, and not trusting guidance from providers, it’s crucial that everyone involved – the Government, advice agencies, the industry and the regulator – put in place a consumer-friendly system that supports people to make the right decisions.”