Chancellor George Osborne has revealed a new “right to advice” as part of an overhaul of the pensions and savings system.
In his Budget speech today, the chancellor set out that people retiring with a defined contribution pension scheme should be offered “free, impartial, face to face advice”, and should have the ability to shop around for the best deal when it comes to buying an annuity.
The Government will inject £20m to fund the initiative, plus will impose an unspecifed levy on pension providers and trust-based schemes.
Osborne said: “We are going to introduce a new guarantee, enforced by law, that everyone who retires on these defined contribution pensions will be offered free, impartial, face-to-face advice on how to get the most from the choices they will now have.
“Those who still want the certainty of an annuity, as many will, will be able to shop around for the best deal.
“I am providing £20m over the next two years to work with consumer groups and industry to develop this new right to advice.”
The full Budget document says that to deliver this, the Governement will introduce a new levy on pension providers and trust-based pension schemes to offer this “guidance guarantee”.
Osborne earlier revealed a radical overhaul of pension rules which will mean that from April 2015 anyone over the age of 55 will be able to take their entire pension pot as cash.
He also set out that cash Isas and stocks and share Isas will be merged, with the annual allowance boosted to £15,000.