The move would see all pension savers aged 50+ signed up for a free guidance appointment with Pension Wise unless they opted out - a similar approach to pensions auto-enrolment.
Stephen Lowe, group communications director, says in a Guest Column for Financial Planning Today that the move will also help promote usage of professional financial advisers as many people who talk to Pension Wise, the government-funded pension guidance service, go on to seek professional advice, according to recent data.
In an exclusive column for Financial Planning Today Mr Lowe warns that the move is needed because too few people are using Pension Wise or getting professional advice when making important decisions about pensions.
He says: “We think that low usage means it is time that guidance sessions should be automatically booked for pension savers in their early-50s so they understand the pros and cons of each option before they make up their minds about how to access their pensions.
“They should be able to defer these appointments if the time is not right, or opt out altogether if they felt they already have the knowledge they need, for example, because they are receiving regulated advice.”
Mr Lowe says it is concerning that FCA data shows more pension pots are being withdrawn but fewer pension savers are getting advice.
He said: “Recent Financial Conduct Authority figures show more pension pots are being taken but fewer with advice. Guidance is clearly a doorway to more people taking advice so boosting usage is likely to have a positive impact on the number taking advice as well as helping to reinforce in the public’s minds the professionalism and expertise of the sector.
“The Financial Conduct Authority is now looking at how to do this. We hope the regulator will be ambitious. Pension savers – and advisers – have nothing to fear and much to gain.”
Mr Lowe says recent official data shows more than one third of pension savers (36%) took advice in the three months after their appointment with Pension Wise - equivalent to more than 50,000 people.
He added: “The numbers show advice take-up is nearly two-thirds (63%) higher after a session than before, providing further evidence it is a catalyst for people to take advice.”
Some seven in 10 Pension Wise ‘appointment bookers’ (72%) said they would pay for financial advice if the costs were reasonable, compared to fewer than half (48%) of adults generally.