Legal & General is to pilot three different retirement guidance models with advice firm LEBC and The Pensions Advisory Service in a bid to support the radical reforms announced in last month’s Budget.
The Budget changes mean from April next year anyone aged 55 or over will be able to take their entire pension pot as cash.
Chancellor George Osborne also promised that everyone will have access to “free, impartial, face-to-face” guidance about their retirement options. The Treasury has stumped up £20m to support the pledge and handed responsibility for building the guidance model to the FCA.
Advisers have raised doubts about whether face-to-face guidance for all can be delivered by April 2015 and insurers are split over the role they should play.
L&G will pilot three alternative models and, in conjunction with LEBC and TPAS, offer guidance to determine the impact of each model on customer experience. The results will be sent to the FCA in June.
L&G head of individual annuities strategy Tim Gosden says: “We are looking to pilot three different models with L&G giving the guidance, LEBC giving the guidance and TPAS giving the guidance.
“The idea is to scope out what the guidance might look like and feed into the consultation process on this. So this should be done and dusted ahead of 11 June [when the FCA stops accepting guidance submissions].
“We are still working on the scope of the guidance. It will be focused on people in the run-up to retirement and assess how they feel about receiving guidance from the different organisations.”
LEBC longevity director Nick Flynn says: “We are going into this with a very open mind. We still need to pin down the detail in terms of the customers we will be looking at but it is potentially an exciting opportunity.”