Industry demands Govt intervenes over Pension Wise funds row

Pension Wise jenga

Providers, advisers and politicians are calling on the Government to investigate how a Citizens Advice delivery centre was able to use Pension Wise-funded staff for non-pensions work.

Earlier today, Money Marketing revealed how the Derbyshire Districts branch redeployed staff funded by a £35m a year levy on financial services firms and advisers.

Citizens Advice says it is an “isolated incident” that has now been rectified.

A senior source at a major provider says: “It’s outrageous. They clearly don’t have proper controls in place. We are pored over by the FCA over our controls and processes to ensure we treat customers fairly. This is clearly an organisation that is very loosely run.

“This should not have come out through a whistleblower, the Government should pick this up – they should be immediately alerted that money is being spent on the wrong things. That’s worrying.”

Apfa director general Chris Hannant says: “The funds that have been raised for the purposes of Pension Wise should only be spent on Pension Wise. If take-up is low and Citizens Advice doesn’t want to terminate staff contracts, then it needs to pay for those salaries itself. I would then expect there to be a rebate to levy paying firms in the following year.

“Citizens Advice needs to have a clear audit trail to demonstrate that funds raised to pay for Pension Wise are being used solely for that purpose. If there is no clear audit trail, a full investigation is needed because we are talking about criminal theft and misappropriation of funds.”

Treasury committee member Mark Garnier MP says: “This is exactly the sort of thing that we need to be worried about and be asking questions about.

“Is there a fundamental problem here? Clearly this highlights, if anyone was in any doubt why the government needs to review pension wise and the services around it on an ongoing basis.

“As a more general point I think there is a problem with debt and the more clever people we have helping with that the better, but that doesn’t mean that the investment community should pay for it.”

Syndaxi Chartered Financial Planners managing director Robert Reid says: “Advisers didn’t sign up to pay for Pension Wise in the first place and we certainly didn’t sign up to pay for Citizens Advice.

“The money was for a specific purpose and Citizens Advice cannot simply do what they want with it. We now need an independent investigation and anyone who is involved needs to be held to account.”

Plan Money director Peter Chadborn says: “This is another example of how easy it is to spend other people’s money. It is very frustrating for anyone running a small business to be funding another organisation which does not have to be accountable for how those funds are deployed.

“Even if it is an isolated incident, it should never have happened in the first place. Any spare money should be refunded to levy paying firms or used to meet the objectives of Pension Wise, for instance by funding additional advertising.”