Aegon has welcomed the recent announcement from HM Treasury, which brings ‘targeted support’ a step closer, possibly benefitting millions of savers and investors.
Steven Cameron, Pensions Director at Aegon, said:
“We welcome HM Treasury publishing its plans to create a new ‘targeted support’ regulated service for customers seeking help with pensions and investments.
This comes alongside the Chancellor’s decision to defer any limit on the amount which can be paid into a cash ISA each year, which would have complicated the ISA regime without necessarily encouraging more savers to invest.
Many customers may not have the best balance between cash savings and stocks and shares investments. For those who don’t seek advice, targeted support will equip more to make the right decisions for themselves. This includes understanding the benefits of moving excess cash into a stocks and shares ISA, potentially benefitting from much higher returns, albeit at the expense of the ‘no loss’ security of cash savings.
The Government and the financial regulator, the FCA, have been working with the industry on this for some time. From next April, banks, building societies, pensions and investment firms can seek authorisation to offer the new – and likely free – ‘targeted support’ service. This will sit somewhere between the current options of general information/guidance and full financial advice. Unlike full advice, it won’t involve a personalised recommendation based on each individual’s full circumstances. Instead, firms may reach out to customers offering suggested actions to groups of people sharing common characteristics.
One specific group the Government and regulators see this helping are the 7 million individuals with over £10,000 in ‘investable assets’ held solely in cash, who have not received advice. Many of those who are prepared to take some investment risk and have no short term need for their funds might get a better return on their money by investing some of it in a stocks and shares ISA.
The Government is also hoping that some of the money invested will go into UK companies, helping boost UK economic growth.
As well as offering suggestions around investing ‘excess’ cash, targeted support may be used to suggest contributing more to a pension for an adequate income in retirement, or to support choosing between different retirement income options.
Today’s publication from the Treasury brings targeted support one step closer to reality.”
