Sipp firm voices concern about Budget pension advice plan

A Sipp provider has echoed concerns about how the new free and impartial pension advice announced in the Budget will work. Chancellor George Osborne announced his radical pension reforms last month – which included access to advice for some people at or near retirement.But questions have been raised as to what this actually means in practice. The proposal came under scrutiny at the Treasury Committee this week, where MPs said there needs to be much more clarity on the issue.The need for guidance and advice over a longer period of time – rather than just a one off session for a retired person – was also a cause of concern raised at the committee.Pointon York's business development manager Dale Wadsworth told Sipps Professional his firm has similar worries.He said: "Whilst we welcome the proposed introduction of free and impartial guidance for all members, how will this work in practice with large numbers of clients being offered advice in locations throughout the UK and abroad?"Some clients may need advice on an ongoing basis not just at retirement to ensure that that they continue to be able to meet their goals."{desktop}{/desktop}{mobile}{/mobile}The Government has insisted its changes to pensions, particularly on annuities, are centred on greater choice and freedom.Mr Wadsworth said: "Increasing flexibility on pension schemes could lead to clients deciding to go into inappropriate products without much protection."For instance is it appropriate for clients who have low income and small pension funds to go into drawdown to release the pension over a number of years?"In these circumstances the discipline and guarantee offered by an annuity could still be the more appropriate solution."However, Pointon York broadly welcomed the reforms "as very positive for the pensions sector".Mr Wadsworth said: "Recognition of the real advantages of drawdown rather than near automatic lifetime annuity purchase is seen to be of great benefit to large parts of the retiring population."Up to now, these people may have been disadvantaged by simply buying an annuity from their existing provider rather than considering the multitude of alternative options available."

Sipp firm voices concern about Budget pension advice plan

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