Only 2.5% of retirees take up free pension advice
Just 2.5% of retirees have opted to take free financial guidance from Legal & General (L&G), leading to fears that most retirees will have no financial help when accessing their new pension freedoms.
The guidance scheme was launched by L&G to help people understand the new pension regulations and how it would effect them. Through the Pensions Advisory Service they contacted 9,000 individuals coming into retirement but only 225 people took advantage of the free guidance. Once a wake up pack was sent through to people with only six months left till retirement the rate increased to 4%.
From next April anyone over the age of 55 will be able to access their pension pot and will be provided with free impartial pension guidance. Experts are worried the take up may be as small as 10%, and some question whether is should be made compulsory.
L&G individual retirement solutions director of strategy Tim Gosden says:
“We expect the uptake to improve next year as there will be a media build-up. It was very early on and we now know we have to communicate about the guidance guarantee in written and verbal communication. The objective is to make aware consumers about the options and choices instead of making a recommendation.
“It will be difficult to get around consumer apathy without making it compulsory. The choices are far more complicated and there are so many more opportunities to make big mistakes such as people cashing in their pots, which could have a significant effect. It’s freedom and choice but also a minefield which is why the guidance guarantee is so crucial.”
Need financial advice?
If you have any personal finance questions related to this news article, then please contact our financial advisers. You can get in touch by asking a question online, calling us on 0800 092 1245, or by arranging a visit.
Share this..
Related stories
The spin on Sir Fred Goodwin continues
The UK government is rumoured to be behind further suggestions in the financial press this weekend that the true cost of Sir Fred Goodwin's pension will be in the region of £30 million. These ludicrous claims are aimed at forcing Sir Fred Goodwin to give up part of his pension arrangements even though the UK government formally agreed these back in October. So why are the UK government spending s...
Read MoreMassive growth in public sector pension millionaires
A Freedom of Information Act request has revealed a phenomenal rise in the number of "public sector pension millionaires" over the last few years. Based upon the fact that a £33,000 a year pension would require a pension fund of over £1 million on the open market, a staggering 34,000 public sector workers are alleged to be effective "public sector pension millionaires". This is a damning indictm...
Read MorePension Firm GP Noble Comes Under The Spotlight
As the pension industry continues to try and come to terms with the massive increase in funding requirements of the last few years we have seen the Pensions Regulator use its emergency powers for the first time to suspend Pension Trustees Company GP Noble from a number of schemes. The execution of the emergency powers was both swift and came as a surprise to many in the industry.
A...
Can we really depend on the state for future pensions?
The pension industry has never been far from the headlines over the last 10 years as the situation has changed dramatically to the detriment of UK consumers. Only recently we have seen dozens of final salary pension schemes biting the dust and tax changes which have again hit the long-term attractions of personal pensions. The fact that the UK state pension has effectively fallen in real terms ove...
Read MoreConservative party refuses to bail out Pension Protection Fund
A Conservative government would not underpin the financial liabilities of the Pension Protection Fund (PPF) according to the shadow pensions minister Nigel Waterson. While this headline will make uncomfortable reading for many in the UK who are concerned about their employer pension scheme, there is a reason why the authorities would not automatically underpin compensation payments funded by the P...
Read More