MPs: pensions customers need advice now

29 March 2007
Confused customers need advice on pensions before, not after, they decide whether to opt into a personal accounts scheme, a group of MPs has warned.

Although all parties have welcomed the government's plan to introduce a generic financial advice service, the Work and Pensions Select Committee has cautioned that many customers will feel disoriented as the personal accounts legislation comes before parliament.

Unless they receive the kind of generic, free financial advice the Thoresen review is currently investigating, many will be unable to make an informed decision about whether to back their MPs over the government's pension reforms.

The Select Committee appeal has won support from the Resolution Foundation, which is calling on government to publish cost approximations for implementing a financial advice service "as a matter of urgency".

According to the Foundation's calculations, an investment of just £50 million a year would be enough for government to give people advice face-to-face, online, and over the telephone.

But "the need for generic financial advice to support personal accounts" specifically must be "an early priority" for the new service, the Foundation's external affairs director, Patrick South, insists.

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