The financial advice and guidance system needs a fundamental shake-up so that it helps the majority of people and not a minority, according to insurers.
The Association of British Insurers (ABI) said advice and guidance should be made simpler and more affordable – and it is “not good enough” to leave people to make complicated retirement decisions with little help.
Three-quarters (72%) of people said they will not pay for financial advice, a survey commissioned by the ABI found.
More than 2,300 people across the UK took part in the survey, which included many people approaching retirement.
Nearly half (46%) of people wanted one-off financial advice, while only 12% favoured a more traditional model of advice with ongoing fees.
ABI director general Huw Evans was making the call on Wednesday to ensure advice is fit for purpose, at the body’s conference titled Future-proofing the pension freedoms: what next?
Mr Evans said: “With millions of people exercising unprecedented freedoms to make retirement choices, we need a system of guidance and advice that helps the majority, not a minority.
“When people have saved all their working lives for their retirement, it is not good enough to allow most of them to make complicated judgments about drawdown rates, annuity options and pension options with very limited help.
“This is a shared responsibility for providers, regulators, advisers and government bodies.
“With the Brexit transition period coming to an end, the FCA (Financial Conduct Authority) has a uniquely timed opportunity to devise a system suitable for UK pension freedoms that ensures the majority of savers have access to either guidance or advice as they take decisions that will shape the rest of their lives.”
The ABI said customers should be able to get advice that it is simpler and more affordable, or guidance that offers more help.
It added that the past five years have seen major changes to the long-term savings market, not least with the introduction of the pension freedoms which opened up a range of new opportunities for customers.
The ABI argued that currently, the financial guidance pension providers can give to consumers is limited.
Its research suggests that there needs to be a range of options available to suit individual needs.
The most popular option for accessing information was through a Government website (29%), followed by a pension provider (25%), family (23%), online information (22%) and Pension Wise (21%) – the Government-backed retirement guidance service.