Chancellor George Osborne has dismissed concerns he is confusing consumers by branding his at-retirement guidance service a “right to advice”, claiming he needs to “communicate in English”.
In his Budget last month, Osborne said all members of defined contribution pension schemes will be offered ”free, impartial, face-to-face advice” at age 55 from next April.
Advisers slammed Osborne for “misleading” consumers by branding the service “advice” during his speech when it was clarified in the Budget documents as a “guidance guarantee”.
At the Treasury select committee today, Labour MP Pat McFadden said: “In financial services there is a material difference. Advice is regulated, it carries significantly higher consumer weight than guidance. It wasn’t correct for you to use the word advice in your Budget speech was it?”
Osborne said he was not concerned about calling the service “advice”, suggesting it was a ”technical distinction” and that “advice” was a clearer word to use in his speech.
He said: “There is a technical distinction between advice and guidance. The Budget document exists, I don’t get up and read it out because it contains all the technical details of the Budget and we publish it at the same moment.
“The speech needs to also communicate in English so people watching it can understand what is meant. The issue you raise is not something consumer groups have had a problem with, they all understand what it meant and the general public understand as well.
“The key challenge is working with the industry and consumer groups to get this guidance right.
“There is a distinction; advice is what you receive to invest in a particular product for a particular company. Guidance is; you now have these freedoms so these are your circumstances, you may want to consider this product or that product.
“Our challenge is to make sure we get the best guidance package we can and then if people want to take full advice they can get it.”