Member Article

Governments urged to back safeguards on guidance only pensions ‘advice’ – open letter

The Government should introduce a 30 day cooling off period for those seeking access to all of their pension funds, unless they have been advised by a regulated independent adviser, said Jack McVitie, chief executive officer at LEBC Group.

In an open letter to Chancellor George Osborne and his opposite number Ed Balls, LEBC Group has highlighted the dangers of pension funds being withdrawn in total without the benefit of regulated advice. LEBC Group believes that based on its own experience of advising thousands of retirees each year, that without regulated advice for which an advisory firm takes full responsibility, many consumers could make snap decisions that then ruin their retirement years.

LEBC Group is calling for an additional safeguard for those accessing pensions without regulated advice. They propose a 30 day cancellation period should be imposed before funds taken, without advice, can be paid out. This should also include a warning about the tax to be paid on withdrawals and the need to have a sustainable income in retirement over and above the State pension. During this cancellation period consumers should be reminded of the availability of regulated advice.

McVitie said, “Taking guidance-only could lead to irrevocable decisions being made about a lifetime of retirement savings with no redress or compensation as guidance is not regulated, nor indemnified and is being delivered by unqualified and inexperienced staff. A safeguard needs to be put in place to protect the public from making the wrong decisions when accessing pensions without consumer redress.”

This was posted in Bdaily's Members' News section by LEBC Group Ltd .