The Government should force savers reaching retirement to take guidance if they do not have a financial adviser, LV= says.
In its response to the Treasury’s consultation on public financial guidance, the mutual says low take up advice is creating a “mis-buying crisis”.
In the March Budget the Government revealed it is to create two new guidance bodies, responsible for pensions and money respectively, to replace the Money Advice Service and Tpas.
LV= says the compulsory guidance, which would be funded by an industry levy, needs to be broader than pensions to include other retirement income options.
According to the firm’s research around half a million people retire each year without taking financial advice.
Managing director of life and pensions Richard Rowney says: “The low take up of advice is leading to a mis-buying crisis where people are making important financial decisions without adequate support. It’s essential that all consumers are able to access affordable, regulated advice but when people can’t, or don’t, take advice we believe guidance should be compulsory.
“This would further inform retirees about their options and help them make the most of their money, so we fully support the introduction of a merged, one-shop money and pensions guidance body.
“Making guidance mandatory, and increasing accessibility of advice, would be beneficial to all, as not only would individuals be better off but they would be less likely to rely on state support in retirement and would contribute more to the UK economy.”