Pensions - Articles - Royal London: Advice allowance a very positive step

 “Royal London believes that offering pension savers an advice allowance is a very positive step. Research shows that people who take financial advice tend to save more towards their retirement and recent research by Royal London* showed that 45% of those who had spoken to a financial adviser about their retirement saving, then continue to regularly review their finances with an adviser at least once a year.

 “While it would be a challenge to offer a comprehensive face to face advice service within the £500 limit, this amount should be an adequate level to assist people to identify realistic goals and show them how to start planning for themselves. We expect to see more advice services of this nature on offer, almost certainly supported by technology-based planning tools. This in turn should lead to a greater appreciation of the benefits of impartial financial advice and the need for a more in-depth personal advice service.

 “It is important that the allowance should be available to people well before they reach retirement as this could be too late. So we agree with the FAMR recommendation that the allowance should be available from an earlier age than 55. This would give people still time to fund their pension pot if possible; otherwise they are unlikely to have a realistic degree of choice when they do choose to retire. We also support allowing this option more than once, for example at key birthdays or life changes.”