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Industry, Government and regulators need to work together to boost financial literacy and advice, says a new report.
Government, industry and the regulator should work together to extend the take-up of financial advice, according to a new report.
The report from the International Longevity Centre UK (ILC) says this would ensure an extra five million people understand enough to plan for later life by 2030. It says financial advice boosts confidence and preparedness for retirement, but too few people are accessing advice, despite it being more important than ever due to changes in pensions and financial service regulations over the past years which place increasing responsibility on individuals to plan for their own retirement income.
Building on previous research, which found that taking advice leads to an average increase in retirement income of £47,000, ILC’s new qualitative analysis, supported by St James’s Place, finds that financial advice significantly improves financial literacy, boosts confidence, gives people greater control of their finances, offers greater reassurance and provides greater peace of mind and security.
However, it says there remains to be a significant advice gap in the UK, with less than one in six people taking advice and particularly low uptake rates for women. Key barriers identified in the report are a lack of awareness of what advice is (and is not) and a lack of knowledge of where to find an adviser.
ILC is calling on Government, industry and the regulator to boost take-up by highlighting both the non-financial as well as the financial benefits of advice; reassuring individuals, through marketing and policy interventions, that the advice which they will receive is designed for their specific needs; and increasing the supply and efficiency of advice with the support of technology and through better recruitment and training opportunities.
Arunima Himawan, Research Fellow at the ILC says: “To achieve real change, we urgently need to see collaboration across industry and Government to better communicate the financial and non-financial benefits of advice, to explore ways of reaching a more diverse customer base and to increase the supply and efficiency of advice.”