Towards the end of July, the government confirmed that "savers are to receive free independent guidance when given unfettered access to their pension pots from next year." However, after the news was announced, Radio 2 morning news used the headline "Free independent advice for pensioners". If the BBC doesn't know the difference between guidance and advice, there is no hope for anyone!
If you are approaching retirement, considering the best options available can be confusing at the best of times. Unbiased, the home of professional advice, asked consumers whether they knew the difference between pension advice and pension guidance. A staggering 73% of people surveyed claimed not to understand the difference.
The results above, combined with the changing pension landscape can only add to an individual's uncertainty regarding some of the most important decisions they will make.
To clarify the update from the Chancellor, George Osborne has promised free, impartial help for savers contemplating how to use the new pension freedoms. Every saver will be entitled to obtain guidance, at no cost, delivered by independent organisations rather than pension schemes or providers. For example, the Pensions Advisory Service or the Money Advice Service. Again, the above organisations may include the confusing 'advice' in their names, but the service you will receive will only be guidance and not tailored advice.
Once an individual has received their free guidance from the Pensions Advisory Service or the Money Advice Service, the next step would be to speak to a Financial Adviser like Retirement and Investment Solutions. Financial Advisers are qualified and regulated by the Financial Conduct Authority to ensure consumers are receiving up-to-date knowledge from firms they can trust, which means Financial Advisers are ideally placed to give individuals advice specifically tailored to their needs and particular situation, something that the Pensions Advisory Service or the Money Advice Service are not.