The UK's HM Treasury and financial watchdog will be working together to examine how financial advice could work better for consumers.

The UK government is embarking on a major review to “radically” improve access to financial advice.

The UK-wide Financial Advice Market Review will be led by HM Treasury, the government's economic and finance ministry, and the Financial Conduct Authority. It follows the recent British pensions overhaul, which granted individuals greater freedoms over their retirement pots and in turn fuelled demand for retirement planning services.

“With advisor numbers at a twenty five year low but demand for advice, primarily due to the pension freedoms, on the rise, the advice gap is only likely to widen due to a lack of availability and accessibility. It’s therefore very encouraging to see that the Treasury has launched the Financial Advice Market Review to tackle this issue,” said Jon Everill, head of advisory services at FundsNetwork, a UK investment services platform.

The review will consider all types of retail financial products including pensions, savings and insurance, and will report ahead of the Budget 2016. It seeks to:

- Ensure the regulatory and legislative environment allows and encourages firms to innovate and grow their business models to include affordable and accessible financial advice;
- Consider ways to encourage people to seek financial advice, addressing unnecessary barriers that currently deter them;
- Examine the “advice gap” for those people who want to “work hard, do the right thing and get on in life but do not have significant wealth”.

“Making sure that our financial services sector supports working people at every stage of their lives is a key part of our long-term plan,” said the economic secretary to the Treasury, Harriett Baldwin, in a statement.

An expert advisory panel for the review, which will include industry and consumer voices, will be chaired by the chairman of Scottish Widows, Nick Prettejohn.