Aifa and Prudential have today published a paper calling for greater investment to help those approaching or in retirement, as well as those advising them.
Aifa wants to see the encouragement of greater individual responsibility for personal finances and better funding for the £150 per annum tax exemption for advice to employees.
It is also proposing that the industry develops a plain English glossary of pensions terms after research showed that 56 per cent of consumers do not understand the language financial services firms use.
Aifa director general Chris Cummings says: “There must be an holistic approach to the decumulation market from industry, Government and regulators to ensure that more people maximise their income and wealth in retirement.
“We must make sure that consumers can access good, professional advice when needed and that the industry can provide access to a wide range of services and products to utilise the variety of assets retirees now have.”
Prudential retail life and pensions managing director Barry O’Dwyer says: “It is a fallacy, for example, for regulators and product providers to assume that consumers diligently read all the information targeted at them and respond in a rational manner.
“The reality is that such communications are often either ignored, or drowned out by other news. One of the lessons of behavioural finance is that the workplace provides a cost-effective channel to engage employees. To realise this potential the report calls on the Government to provide a more generous tax break for workplace advice.”