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Should savers be given free advice ‘voucher’ at retirement?

Ukip has been accused of “mollycoddling” retirees after proposing to offer a guarantee of free financial advice to protect savers following the introduction of pension freedoms.

Nigel Farage’s party unveiled the plans last week as part of their manifesto launch. One idea being considered would see retirees given a “voucher” to spend on advice.

The party has yet to establish exactly how the plans would work, and is seeking consultation with the Chartered Insurance Institute and the Personal Finance Society to fill out the details.

However, advisers have objected to the scheme both on principle, as well as feasibility grounds.

Wingate Financial Planning director Alistair Cunningham estimates that roughly 200,000 people reach retirement age every year, with more than 10 million people currently aged over 65.

He says: “You might be talking about £200m just for people reaching 65, but is it fair to offer that just to a specific age group, rather than everyone over the age of 65?

“Even if only half take it up that is going to cost billions of pounds. The problem with all parties that aren’t going to run the country is that they can make promises that are less likely to attract scrutiny.

“I don’t believe it’s a reasonable thing to offer because someone has to pay for it. It should be down to the individual to fund the cost of their own advice. And to offer it uniformly because of someone’s age, rather than affordability, to me is not fair.”

Yellowtail financial planning IFA Dennis Hall adds:  “It’s still the taxpayer who is going to have to pay that somewhere, but if people want advice they should go and pay for it and take some responsibility for that in the first place.

“Politicians mollycoddle the population. At some point people have got to stand up and take some responsibility and that means financial responsibility, too.”

Hall also questions how Ukip’s plans would apply to advisers in more expensive locations, such as central London, and whether retirees would be able to get less advice when visiting such firms.

He says: “I’m in a commercial organisation so I don’t want to give it away. It takes advisers quite a lot of time to talk people through their options.”

Adviser view

Matthew Bird, adviser, Seer Green

It sounds like a good idea in theory. People are having to make crucial decisions about their future and everyone approaching retirement should get some financial advice, so maybe a voucher system could help.

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. I wonder if we could pay our tax with vouchers too…. why are our politicians all acting like Homer Simpson? The State pension is effectively a tax free income… why on earth can’t someone that has reached State pension age and needs advice pay for it…. whilst Alistairs figures (seem a bit light by ONS stats I think) about numbers reaching 65 surely most of them dont really need advice… most dont have complexity, those that do, have it because they have assets or income that creates a genuine tax “issue”… in which case they have the resources to pay for it…. this is just more of the same old nonsense that advice is free… which has morphed into politicians that dont know the difference between the debt, the deficit and how much they spend and how much tax is generated, whilst pretending that they have “costed plans”… they are utterly pathetic.

  2. Isn’t free advice what George Osborne said the government would be setting aside £20m to fund when he announced the new unfettered access provisions in March last year? And hasn’t the idea of vouchers already been proposed by many people on these very pages alongside those of various other online publications?

  3. I can very well remember the days of “luncheon vouchers”. Trouble was I was never given enough to buy the perfect sandwich!

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