The Association of British Insurers (ABI) has called for a “fundamental rethink” of pension advice and guidance regulations after finding that almost three quarters (72 per cent) of consumers would not pay for it.

ABI said reforms would enable providers, trustees and the Money and Pensions Service to help customers be more effective in choosing what they want to do with their pension, which it added was “vital for consumers in the current era of low interest rates and increasing reliance on defined contribution schemes”.

It also stated that any new reforms would need to enable more affordable an comprehensive advice, as the current advice pension providers could offer consumers is limited, and highlighted the need for advice to be “simpler, more accessible and fit for the future”.

Polling commissioned by the association found that almost half (46 per cent) of consumers wanted to receive one-off advice, compared to just 12 per cent who favoured continuing the current model of ongoing advice and payments.

The survey found that the most popular option for accessing information in the future was through a government website (29 per cent) followed by pension provider (25 per cent), family (23 per cent), online information (22 per cent) and Pension Wise (21 per cent).

ABI director general, Huw Evans, said: “With millions of people exercising unprecedented freedoms to make retirement choices, we need a system of guidance and advice that helps the majority, not a minority.

“When people have saved all their working lives for their retirement, it is not good enough to allow most of them to make complicated judgements about drawdown rates, annuity options and pension options with only limited help. This is a shared responsibility for providers, regulators, advisers and government bodies.

"With the Brexit transition period coming to an end, the Financial Conduct Authority has a uniquely timed opportunity to devise a system suitable for UK pension freedoms that ensures the majority of savers have access to either guidance or advice as they take decisions that will shape the rest of their lives."

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