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Pensions Policy Institute says Govt does not value pensions advice

PPi director Chris Curry says the Government is focused on cutting pension schemes to rebuild trust in the industry.

The Government does not value financial advice for retirement planning as it focuses on cutting costs, according to the Pensions Policy Institute.

Speaking at the Money Marketing Retirement Planning Invitational in London last week, PPI director Chris Curry said the lack of advice risks undermining value for savers.

He said: “At the moment advice is not really anywhere on the Government agenda. It does not seem to be valued as a particularly useful Government policy tool.

“If you read the press and look at auto-enrolment there is much more focus on getting charges and costs down.”

He said the Government believes all schemes are equal so lower charges will produce better incomes.

Curry said: “The problem is you cannot assume everything is equal. If you have advice in the workplace that encourages fewer people to opt out and increases contribution levels, even if it costs more, then the value is greater.

“There isn’t a focus on value at the moment, it is just about making things cheap and using inertia.”

Curry also questioned how the Nest charging structure would square up to a Government annual management charge cap.

Last month the Government launched a consultation on a charge cap between between 0.75 per cent and 1 per cent.

Nest operates a dual charging structure, with members paying a 1.8 per cent contribution fee on new investments alongside a 0.3 per cent annual management charge.

Curry said the charge cap will boost trust and confidence in the industry but will only cut costs for a small number of people.

Wingate Financial Planning director Alistair Cunningham says: “There are complicated retirement planning cases where advice is always needed. The problem with not focusing on advice is people using Nest are ending up with only the most basic provision.”

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