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Boost your income from pension advice

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28th Nov 2013
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Accountants may be able to boost their income from advising people on pensions by offering interactive online technology to explain how tax affects savings, reports Nick Huber.

This was one of the suggestions in a recent survey on pensions.

Four in five people want financial advice before selecting a pension, according to the survey by Dunstan Thomas, a pension adviser, and Lancaster University Management School.

That could be good news for accountants and other financial advisers but they need to do better at explaining pensions.

The research found that people find jargon about pensions hard to understand. It also found that people want pensions explained in different ways depending on their age.

For example, young unmarried, well-educated people with advanced internet skills are most interested in seeing the value of the pension fund, followed by the “target” income they would like to retire on.

Their third highest priority is seeing the value of the “tax free cash” amount they will receive at retirement. This group said they prefer graphs that illustrate the difference between projected and “target” Income.

By contrast, older people, some of whom are retired already, with basic internet skills, large families and decent pensions, would prefer seeing target Income first and tax free cash values next. The income they are getting is much more interesting than the amount they have amassed in their pension. 

Financial advisers can use online software to make documents such as a “key features illustration” more engaging while still complying with compliance rules, the research said.  “It should be possible to dynamically move around the order of an illustration document to reflect features that the consumer is most interested and engaged with.”

Compulsory work pensions are one of the main tasks facing payroll staff.

Experts have welcomed the idea of auto-enrolment pension schemes that are used by millions of people. But the details of schemes have been widely criticised.

In September, the Office of Fair Trading said the schemes are too complex and often give poor value money.

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