Problems with free financial advice line for pensioners
The government should provide free financial advice for poor pensioners to help them decide whether to sell their homes to help fund retirement, according to the Institute for Public Policy Research (Ippr).
The Ippr is concerned about pensioners living in big houses, but on small incomes, who they call "asset-rich income-poor".
A new report by the institute suggests a telephone advice service would be the best way to explain to this group of pensioners whether it is in their financial interest to 'trade-down' by selling their house and moving to smaller one or to use an equity release scheme.
The Association of Independent Financial Advisors (AIFA) strongly disagrees saying equity release is too complex an area to be advised over the phone for free.
"We think people need face to face advice for this issue [equity release]," said Tracey Mullins from AIFA.
"They need to see someone in person and the person who received advice needs specific advice. The adviser needs to go through all their financial background; it's not just a general quick chat on the telephone."
She goes on to say that consumers need support if they get the bad advice and even if it is free advice someone has to pay for it, otherwise it would mean IFAs were faced with working on a free service where they carry full liability if anything goes wrong.
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