Royal London is working with the Government’s “nudge” in a bid to boost take-up of Chancellor George Osborne’s retirement guidance guarantee, chief executive Phil Loney says.
Fears are growing that the majority of people who utilise the new pension freedoms from April next year will not receive advice or guidance on the options and potential risks.
Last month, Money Marketing revealed just 2.5 per cent of savers took up the offer of pensions guidance in a major Legal & General pilot. The Pensions Advisory Service, which will deliver telephone guidance to retirees, expects take-up of around 25 per cent.
Speaking following the publication of Royal London’s Q3 results, Loney says: “We are currently working with The Pensions Advisory Service and the Number 10 ”nudge” unit to test different approaches to increase customer take-up of the Government’s guidance guarantee. We see successful guidance as likely to increase the market for regulated impartial financial advice.
“The guidance guarantee, although welcome, will not be enough to ensure that the public gets the best outcomes from the Government’s reforms. Customers who do not have access to a regulated financial advisor are particularly at risk.
“We are working on future ways to give our retiring non-advised customers access to independent and impartial advisory firms at low cost, and on product solutions, such as our open market annuity panel, which bring the best products in the market to our non-advised customers.”
Royal London saw group pension sales more than double in the first nine months of 2014 to £1.73bn.
Individual pensions sales were up 22 per cent, from £775m in the first nine months of 2013 to £946m this year.
Drawdown sales rose by almost a quarter during the period, from £471m to £579m, while protection new business dropped 29 per cent, from £344m to £244m.