The Low Incomes Tax Reform Group made the call and suggested any such new organisation must avoid the ‘flaws’ of Pension Wise by employing qualified financial advisers.
In response to the Government’s Public Financial Guidance consultation, the group recommended that advisers should establish a body that mirrors services offered by tax and debt charities.
The campaigners recommended that the services should be funded by the regulated financial industry, in the same way as the tax charities’ advice services are funded by the tax profession with contributions from government. They, along with the current tax and debt charities, could be overseen by a restructured Money Advice Service and the Financial Conduct Authority, to ensure it is regulated, the group proposed.
In a statement, the group said: “A similar service should be set up to give advice about pensions. Doing so would create a well-connected network of advisers able to give free professional advice on an individual basis to those unable to pay professional fees.
“Crucially, LITRG recommends that the two new charitable enterprises, unlike some existing services such as Pension Wise, must be staffed by qualified financial advisers who would most likely be acting as volunteers.”
The two new services should have local branches to offer face-to-face meetings to people who cannot access telephone or online advice, and national helplines, it said.
The new pension advice service recommended by LITRG would complement, rather than replace, Pension Wise.
The organisation recommended that users of both new services should be offered independent, personal advice providing specific solutions that take account of their circumstances, such as their health, family commitments, assets, state benefits and their aspirations.
Anthony Thomas, chairman of LITRG, said: “People getting by on low incomes should have the same kind of access to high quality independent financial advice as anyone else, especially when it comes to pensions and savings. It is disappointing that tax was only mentioned once in the consultation given that it should form such an important part of any financial decision.
“A network comprising the new services suggested by LITRG, along with existing debt and tax charities, would allow individuals requiring tax advice to be referred to the specialist tax charities, or those requiring debt or financial advice to be referred to a relevant charity within the network.
“The current Pension Wise service is limited because it offers only general guidance which is given by staff who may not be qualified financial advisers. It is crucial that individuals who are unable to pay professional fees have access to advice that is based on their individual circumstances and is given by fully qualified professionals. We do not want a service such as Pension Wise where it seems people are reading from a script.”
He said: “Any new services should follow the existing tax charities model by providing a national helpline with face to face support in local areas. Locally-based services supported by a national helpline as part of a network of similar services, including tax advice, will ensure that those unable to pay for financial advice receive the help they need.”