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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.”

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