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Advisers fear deeper pockets needed to fund Pension Wise

The Treasury says it will not raise extra funds from the industry despite announcing an additional £19.5m to support the pension reforms and its guidance service Pension Wise.

The Budget document says: “Additional funding of £19.5m in 2015/16 will be provided to support the new pension freedoms and the new pensions guidance service, Pension Wise. This funding will extend the availability of state pension statement and pension tracing services.

“It will also provide for extra delivery capacity for Pension Wise: the Government has put plans in place in case there is a need to draw on Department for Work and Pensions resources to help manage any initial spike in demand for the service.”

A Treasury spokeswoman says the Government will provide the funding for the state pension statement and pension tracing services.

But she says the proportion of the £19.5m designed to support Pension Wise will come from the industry. She refused to say how much this would be.

However, she says: “This has already been included in our estimates for the annual levy.”

The Government estimates the annual running costs of Pension Wise will be £35m, of which advisers are set to pay £4.2m.

Advisers say they remain concerned that they will be forced to contribute more to the levy.

Informed Choice managing director Martin Bamford says: “It is strange for the Treasury to announce this as additional funding, but then say it has already been taken into account.”

Yellowtail Financial Planning managing director Dennis Hall says: “The Government is trying to estimate the costs, but that is very difficult to do and it is highly likely they will have to find a shortfall from somewhere. I have no doubt that somewhere down the line the industry will be forced to put its hands deeper in its pockets.”

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  1. Isn’t this just great news! Thanks George.

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