Enabling consumers to access a small part of their pension which would go towards getting professional financial advice would make it more affordable, The Financial Advice Market Review concluded.
It also recommended to the FCA and Government that a pensions dashboard should be made available to consumers by 2019.
The report stated: “HM Treasury should explore options to allow consumers to access a small part of their pension pot before the normal minimum pension age, to redeem against the cost of pre-retirement advice.
“This will ensure that consumers can access financial advice at a key milestone in their lives and feel confident in making financial decisions as they approach retirement.”
The report also urged the government to explore ways to improve the existing income tax and National Insurance exemption for employer-arranged pension advice.
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The Treasury should “challenge the industry to make a pensions dashboard available to consumers by 2019, bringing together industry and consumer representatives to help them set direction and drive progress”, the panel said.
The report stated: “In some areas, particularly pensions, where people can build up several pots in different places over their working lives, it can be difficult for consumers to access data on their own savings to support planning.
“This can lead to a lack of consumer engagement. There are currently a number of projects looking at the idea of a ‘pensions dashboard’. A pensions dashboard is a consumer-friendly digital interface that would display information about all of an individual’s pension savings in one place.
“This data would ideally be retrieved directly from providers and would not require lengthy data input by the individual.
“The dashboard could update in real time and contain projections of pension income based on different scenarios. These projects involve a wide range of industry and Government bodies.”