New guidance body should report on consumer outcomes – LV=

In response to the government’s consultation on the consolidation of the Money Advice Service (MAS), The Pensions Advisory Service (TPAS) and Pension Wise, the insurer said these measures should ensure consumers are being supported to make the right decisions.

According to LV=, major changes in the pensions market in recent years have made it more important that people have access to guidance and advice. It warned that people making critical decisions without support could lead to a ‘misbuying’ crisis – but argued that reporting on consumer outcomes should help to avoid this.

Research by LV= found just one in 10 (12%) of over-55s who are not yet retired are planning to use the government’s free guidance service Pension Wise, while almost two-fifths (37%) have never actually heard of it. A similar proportion (41%) said they do not plan to take regulated advice when they retire.

Consumers who have used Pension Wise tended to offer positive feedback, the research indicated, but LV= added the real challenge would be encouraging people to take advantage of the service in the first place. The insurer said it wanted impartial guidance to become the default option at retirement for those who have not taken advice.

LV= argued financial advice should be promoted where the service identified someone who would benefit from it. It also said the body should provide guidance for specific events, such as buying a property or having a child, and should prioritise helping people build “financial resilience” against the consequences of illness, unemployment, retirement and death.

‘Consumers value government-backed guidance’LV= head of policy Philip Brown said the company fully supported the new guidance body and felt it was “a golden opportunity to tackle the issue of people retiring without support”.

He continued: “There are many positive aspects of existing guidance services that should be retained – for example, the MAS comparison tables and TPAS’s dispute resolution service – but the new body’s remit could be expanded to help even more consumers.

“Requiring the body to focus on achieving quality outcomes from guidance and to report on the number of referrals to regulated advice should ensure consumers have the help they need to make important financial decisions.”

Brown added: “Consumers genuinely value government-backed guidance – particularly at key events such as retirement – and we expect the new body to provide the high-quality, impartial guidance UK individuals need.”