Liberal Democrats leader Vince Cable has said governments have failed over advice and guidance as he called for a ‘mass scheme’ to be introduced.
Speaking at Tisa’s annual conference in London today, Cable (pictured) criticised successive governments’ over their policies on guidance.
‘Advice and guidance is an area where governments have promised and not delivered,’ he said. ‘The idea of a GP-type consultation which people could use…that has fallen by the wayside.’
Cable said what is needed is a government scheme to help the mass market and not just the few who use the current guidance bodies.
‘The big controversy at the moment is a regulated arrangement which touches only a handful of people and a mass scheme is what is necessary but would be more expensive. I would like to see that happening,’ he said.
‘We are way behind in terms of financial literacy and understanding,’ he added.
In September a House of Lords memo criticised the government's distinction between advice and guidance. It claimed that advisers were limited in what they could say to clients due to the definition.
When debating the Financial Guidance Bill Lords added an amendment designed to ensure everyone wishing to access their pension received some form of financial guidance.
The issue has become prominent following the introduction of pension freedoms in 2015.
During a speech which reflected on the savings policy which the Coalition introduced, Cable warned the introduction of pension freedoms has seen some individuals splurge their pots.
‘We are getting a phenomenon that some individuals who try and turn their pensions into cash, go on a world tour and then hope there will be a safety net,’ he said.
But Cable said this was only a small phenomenon so far.
‘The end of compulsory annuitisation was something I campaigned for,’ Cable added.