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Catch up with the latest press releases from LV=

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LV= response to the FCA’s interim findings of its study into the retirement income market

Press release: 12/07/2017

The pension freedoms have given retirees welcome flexibility at retirement but the regulator's review reiterates the growing issue of people accessing their money without taking advice. Professional financial advice is by far the best way to ensure people are able to make the right decisions at retirement and that their income meets their needs in the long run, but too few people take it up. LV= has repeatedly warned that without action to address this issue we will face a ‘mis-buying’ crisis of consumers making important financial choices without adequate support. We therefore welcome the regulator’s proposals to look closer at consumers who access drawdown without taking advice, as well as improving access to impartial guidance. The new financial guidance body could play a key role in directing people to advice and we believe this should be a specific part of its remit.

John Perks, Managing Director of Life and Pensions at LV=, said

Background

Independent research carried out for LV=, and published today, has found that last year alone around 30,000 retirees could have got an average of £4,000 more over the course of their retirement by switching annuity provider – a total of £130 million.

LV= research has also found that nearly nine in ten (87%) of those who took advice feel confident they made the right choice about what to do with their money while three-quarters (75%) say financial advice helped get more for their money. Revealingly, one in five (19%) who didn’t take financial advice say even though they don’t regret not using it now, they worry they might in future.

Methodology for amount missed out on in retirement: The Pensions Policy Institute (PPI) reported that around 80,000 annuities are purchased each year, of which 52% are purchased from the existing provider. PPI calculated that if 80% of those who purchased an annuity from their existing provider continue to lose around 6.8% of retirement income that could represent a loss of around £130 million over the lifetimes of those purchasing in annuities in 2016. LV= calculated that 52% of 80,000 annuities taken out each year with existing providers, 80% of which would lose out on retirement income, equating to 30,000 people. With 30,000 people missing out on £130 million, that works out as around £4,000 per person throughout retirement.

Methodology for consumer survey: Opinium, on behalf of LV=, conducted online interviews with 2,404 UK adults between 12th and 27th March 2017. Data has been weighted to reflect a nationally representative audience.

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