Pension Wise has been accused of glossing over its low-take up rates while focusing on rave reviews from clients.
The evaluation of the Pension Wise service published by Department for Work and Pensions today says there is a 92 per cent satisfaction rating from customers.
Having used Pension Wise, 92 per cent also feel confident in their ability to avoid scams, versus 78% of those who have not used the service.
However, Stephen Lowe (pictured), group communications director at pension provider Just Group says the results are good but do not address an obvious issue with the overall number of people using the service: “This is another annual update showing that the vast majority of those using the guidance service find it of tangible benefit
“It’s a great set of results but we shouldn’t ignore the elephant in the room – take-up is too low and the reality is that increasing numbers are going it alone when accessing pension cash.
“FCA figures show take-up of guidance and professional advice was flat or falling among those accessing pension cash for the first time, with the exception of those buying guaranteed income for life solutions.”
Lowe cites a data bulletin from the FCA which shows between October 2016 and March 2018 around 69 per cent of clients going into drawdown used an adviser and around 10% were using guidance from Pension Wise.
For those making a full withdrawal the percentage receiving advice went from 38 per cent in the six months to March 2017, down to 32 per cent in the following six months and down again to 25 per cent in the six months to March this year.
The percentage receiving guidance from Pension Wise when making a full withdrawal went from 18 per cent, to 14 per cent and 15 per cent over the three six-month periods respectively.
Lowe says: “Legislation passed in the Financial Guidance and Claims Act will require people to receive independent and impartial guidance when accessing their pension benefits unless they explicitly opt-out of receiving it. The FCA has been charged with developing the rules for how the opt-out process will work in practice.
“The FCA needs to address the findings of its own Financial Lives research that showed widespread misunderstanding among those planning to access pensions, including the half it identified as ‘potentially vulnerable’. Ensuring the majority of people receive independent and impartial guidance or regulated financial advice should deliver positive progress.”