The MP for Reigate, Crispin Blunt, has asked the government to further their assurances on the quality of pension guidance.
The Financial Guidance and Claims Bill, which is going through Parliament, currently states that savers must receive ‘appropriate pension guidance’. This leaves the door open for pension providers to provide the guidance themselves.
Mr Blunt raised the concern that the interests of pension providers and savers are not the same as providers make profits on the decisions made by savers.
As proposed, the Bill also allows commercial providers to ask savers’ permission to opt-out from pension guidance. Mr Blunt raised the fear that savers may be subtly led away from using this guidance at a time when they most need it.
The Reigate constituency employs over 2,000 people in retirement products and services.
The MP said:
“The average saver clearly does not have the expert knowledge of a pension provider. Allowing providers to be the gatekeepers of access to guidance incentivises providers to discourage the use of guidance when it is commercially viable to them and encourage it when they would like savers to consider other options.
We should encourage pensioners to become savvier consumers of financial products so that they reap the benefits from competition in the pension market, and today I have asked for assurances that any advice is both adequately regulated and accessed.
Retirement is a very important stage for people and we must make sure that savers get the best deal they can after having worked hard for many years. Access to pension advice which is not commercially biased will only lead to a more informed pensioner which demands more from its market to the benefit of the taxpayer.”