Guide me to some suitable advice

In his Budget the Chancellor announced a number of things, changes to pension plan benefit rules and ISAs being two of the key items mentioned.

Leaving aside the silly comment he made about pension plan holders no longer having to buy an annuity (that has been the case for many years) he also fell into the trap of mixing up “advice” and “guidance”.

The Chancellor has earmarked £20m of taxpayer monies to create a new service for pension plan holders reaching retirement.

He proposes to introduce a “new guarantee” that all individuals with a defined contribution pension in the UK approaching retirement will be offered guidance at the point of retirement.

This “guidance” will be;

• Impartial and consistently good quality;

• Covers the individual’s range of options to help them make sound decisions and equip them to take action, whether that is seeking further advice or purchasing a product;

• Free to the consumer;

• Offered face to face.

Now, by any measure that is an impressive package but the Chancellor having fallen into the first trap mixing up advice and guidance (he apparently has later claimed that he used the word “advice” because he has a duty to communicate in plain English) climbed out and fell into the second trap of believing that all of the bullet points above could be delivered for “free”.

Hmm, I suspect that when the Chancellor use the word “free” he means someone else will be paying for it.

£20m is one awful lot of money but hand it over to someone like the Money Advice Service and you will see how quickly it will be squandered on cringe making TV adverts and the like.

The Chancellor has a laudable goal in wanting pension plan retirees to be able to make a sound decision (shame he didn’t say an informed choice) but he would be better off giving people a voucher to redeem with an IFA the only true source of real and independent advice.

That would be a much better spend of £20m.

Oh and by the way it is available now A Guide to the Retirement Choices & Options Maze free from Informed Choice.

A Guide to the Retirement Choices & Options Maze

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