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How far will the public travel for pensions guidance?

Tessa Norman Peach 250x255

How far would you be prepared to travel to receive a 45-minute guidance session outlining the basics of retirement planning?

The answer may well depend on your level of enthusiasm for all things pensions, but my guess is the man on the street’s response will be ‘not very’.

Looking through the list of 44 Citizens Advice bureaux that will be offering the Government’s at-retirement guidance service from April, it quickly becomes clear that a lot of people are going to have to travel a very long way to get the “free, impartial, face-to-face” guidance the Chancellor promised.

The service will only be offered at three bureaux across London, there are just two offering it in the whole of the north east, and a quick Google search produces a myriad of addresses that will be an hour or more away from a centre.

Residents of Southend in Essex, for example, would face an hour and 10 minute drive to Maidstone in Kent, or an hour’s drive to the East End of London if they wanted face-to-face guidance.

Given the levels of apathy among consumers, particularly when it comes to finance, you can bet that unless it is made convenient, people just won’t go. 

Citizens Advice is already coming under criticism as a result, but the organisation is doing itself few favours to restore confidence that the service will be accessible to everyone as George Osborne promised.

Its press release says it will also use a number of “outreach locations” such as libraries to enable more people to access the service.

But this was buried in the release and Citizens Advice has refused to provide details on how many locations will be available and how this will work in practice.

It is also refusing to say how many staff in total it is taking on, and what hours the service will be available.

The opening hours will be crucial to capacity; if the service is only available 9am-5pm Monday to Friday, then demand will be much higher in locations such as central London as it will be easier for workers to book a session in their lunch break rather than one close to where they live.

One would hope that Citizens Advice and the Treasury have thought all this through – and perhaps they have – but the lack of detail is worrying.

Of course those who do not wish to travel to a Citizens Advice bureaux can access their guidance over the phone or online.

But given the Chancellor promised face-to-face guidance for all in his Budget speech, it is this aspect of the service which will be most crucial to its reputation.

And considering how heavily guidance is being relied upon to prevent poor consumer outcomes, the Government better hope Citizens Advice bureaux are not empty come April.

Tessa Norman is regulation reporter at Money Marketing

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Comments

There are 12 comments at the moment, we would love to hear your opinion too.

  1. Tessa. As part of your research give several CA offices a call now and see what their response is on the subject. I think you will find your answer to “One would hope that Citizens Advice and the Treasury have thought all this through”!

  2. There are two types of product that are purchased: tangibles and intangibles. A tangible is a quantifiable thing that in many cases exists i.e. a widget, a tax bill, a divorce or a bankruptcy. Tangibles are more often purchased but not often sold. Of course there are exceptions but this is a general rule.

    Intangibles are events yet to occur i.e. a future illness, a future death or retirement. Generally, intangibles are “sold” and not purchased. Fees are not often paid for an event yet to occur. Would a happily married couple pay a lawyer for advice on potential divorce? To sell an intangible you need a salesman/women and a system of remuneration high enough to compensate for the circa two in three clients that do not buy.

    Evidence for this: Stakeholder & Cost of Advice

    Market data shows that fewer stakeholder personal pensions are now being sold via advice to individuals quite simply because there is no provision for the cost of advice within the Stakeholder charging structure and many client have an aversion to fee payments for future events such as retirement.

    Unfortunately, the anti sales regulatory class fail to look any further than the windows of Canary Wharf. They have destroyed a pension system that the British now distrust, can’t understand and, quite rationally, don’t want to pay advisers to invest in.

    Finally the single most important change is to end the public-sector privilege. Why should MPs and local authority officials get better and larger pensions than the rest of us can aspire to? Perhaps if the cost to us of funding this outrange was stopped we would all be able to fund our own pensions rather than theirs! .

  3. Not even far enough to pick up the remote control. What makes anyone think otherwise?

  4. The Southend resident travelling to Maidstone would be looking at £20 car travel costs (including Dartford crossing toll) or £36.70 for a return train ticket.

    Is this going to happen?

  5. The list of CABs is a mess anyway, at least in the copy in the related article linked from this one. Tessa, you say that there are three in London, but the list for London shows Diss & Thetford, which are in the depths of Norfolk! It’s a bit worrying when they can’t even group their offices into the correct regions!

    Good luck to you, Mr Man On The Street, in your quest for guidance, if you can find it, or if you can be bothered, because it’s all going to be as clear as mud, probably delivered by well meaning but clueless people with no industry qualifications or experience. People need advice, vastly different to guidance, total waste of time and resources!

  6. Don’t worry folks when the CAB asks for more money to provide Guidance in more locations we will have to pick up the tab.

    Why didn’t they use an existing system and give people a voucher for a ‘guidance’ session with qualified experts, who we can call independent financial advisers.

    That way most people will be able to access face to face guidance and there wouldn’t be the need for a new structure to be set up.

  7. It wont be long before some bright spark announces that the “free advice” will also cover reimbursement of bus fares, petrol money, parks costs and taxi fares to your nearest CA office, all picked up by the financial services authority.

  8. I think the solution is commission based selling – free at the point of advice with the risk they might actually get sold a retirement to look forward to. Nasty stuff!

  9. It might take a couple of years but I think the whole guidance scenario could end up being a huge boost to the advice sector.

    It is inevitable that someone receiving guidance will take it as advice and do something with their pension monies that goes horribly wrong (Panorama may wish to send in some mystery guidance seekers quite early). Interestingly, there will be no one to blame, no ombudsman and no compensation scheme. A ‘guider’ may get reprimanded.

    When it becomes apparent that it’s not an islolated incident (and it won’t be) the scheme will have to be overhauled and watered down to the point of being worthless, or there will have to be some sort of referral system to advisers (who can take the blame, etc.). I have no doubt this will be dressed up as an ‘enhancement’ to the system for complex cases but will quickly revert to being the default to avoid problems.

  10. I’m sure that if more are needed and staff can be recruited, then the cost can just be passed onto our sector anyway!

    Encouraging the manning of more centres is rather like turkeys wishing for xmas.

  11. Sorry, voting for xmas!

  12. Why not stiff the existing adviser community for a bit more funding, say for another 500 mil so the CA can set up offices & pension advisers in every town & city in direct competition with us.

    Or alternativly for the scale of fees being levied we could all provide 30 – 45 mins free generic advice to joe public on the options available. (or is that what we do!!!!)

    As with the stakeholder designations of 10 – 15 yrs ago I feel joe public’s mass inertia coming on again with a lot of money going down the drain, yet again forced upon us by inept & out of touch politicians & regulators.

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