'Keep Govt out of annuity advice'
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The Government should steer clear of giving annuity advice through its Consumer Financial Education Body and free advice service unless it employs diploma-qualified advisers, according to Annuity Direct.
The Government’s consultation paper on removing compulsory annuitisation by age 75, published in July, calls for views on how bodies such as the CFEB can help individuals make appropriate retirement choices.
Annuity Direct chief executive Bob Bullivant says good retirement advice is not just about buying an annuity.
He says: “I think the Government should stay away from annuity advice, unless it is prepared to do it properly. Everybody thinks it is just about the purchase of an annuity but good retirement advice is about making sure the existing scheme can be transferred into an annuity safely, then choosing the right type of annuity.
“Unless you have got people who understand pre-A-Day rules, pension legislation and the complexities of preceding schemes, you are not going to get it done properly. Frankly, I do not think the CFEB has a chance. Unless it is going to employ people who are diploma-qualified they have not got a hope, it is too complicated.”
Burrows & Cummins partner Billy Burrows says: “A free advice service is fine but it will not give advice, just information. The truth is once you start talking to customers about all the different options, it opens a Pandora’s box which can only be closed with proper advice.”
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Readers' comments (2)
Julian Stevens | 26 Aug 2010 5:55 pm
The only advice that the CFEB should be giving consumers on such a complicated area as retirement income options is to see an IFA who specialises in the field.
Then again, if the whole subject of retirement income options was to be radically simplified, then it would cease to be such a dreadful minefield for all concerned.
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Paul Evans | 27 Aug 2010 8:54 am
Specialist advice services are out there.
If the governement really wants to help retirees they should concentrate on policy changes that would allow the system to work e.g. ensure OMO becomes the automatic choice and arrangement fees are able to be paid from the pension fund.
If every retiree gets on average 20% more income, this will save money for the government and the humble tax payer!
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