Profile: Citizens Advice chief on pushing the boundaries of Pension Wise

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When Money Marketing meets Gillian Guy it is fair to say the atmosphere is just a little tense. After all, it is the first time we have spoken to the Citizens Advice chief executive since a series of stories uncovered how money earmarked for Pension Wise had trickled into the charity’s existing services.

It is also a year since the launch of the guidance service and Citizens Advice’s big foray into the world of pensions.

Appointment numbers hit a record high in March at just over 7,000 telephone and face-to-face sessions.

However, on the whole, use has been disappointingly low and the number of “guiders” across Citizens Advice and The Pensions Advisory Service, which delivers telephone appointments, is to be cut by a third.

Before Pension Wise launched, commentators predicted users would become disillusioned when they discovered they would not be told what to do as a personal recommendation is not part of the deal. Likewise, the content of sessions is narrowly centred around retirement income options. Guy admits she would like to be able to go further.

She says: “When you get to that point where you can’t help anymore, it’s really tough to explain to someone who made the difficult step to come in and reveal all their details and ask for some help, ‘sorry we can’t do anymore’.

“They just don’t understand the difference between guidance, advice, regulated, unregulated,  you and someone else. We must be able to find a solution that is better than that.

“So I wouldn’t say people are angry but they do get frustrated and bemused about what it’s all about. We could probably all go a bit further than we do because the barriers that have been put up make us step back to have a safe margin. There is somewhere we could move without endangering the sanctity of advice.”

Pension Wise received a £20m start-up loan from the Treasury and is expected to cost an additional £39m in 2015/16, with advisers contributing £4.7m of the industry levy.

“We want more tailored guidance, so if you are in a particular situation like divorce you might want to get a bigger picture”

Government statistics show the cost per Pension Wise appointment is around £500, prompting contrasts with the cost of full regulated advice. But Guy says comparisons are flawed.

“The cost is calculated not just on the basis of time spent and resource input to a particular intervention but actually to the whole cost of the service, which is then run out against appointments. That loads the number considerably.”

She will not be drawn into saying what she considers a reasonable cost but adds the expansion of the service into areas like the secondary annuity market, when it launches in April 2017, will have an impact.

Again, Guy is adamant users should be getting more, both in terms of the number of sessions and the scope. “We are very pleased to see the age limit dropped; that’s put more demand into the system, which is great. We’d also like to see the ability for people to come back for multiple appointments, particularly when you lower the age criteria. A lot can change between the ages of 50, 60 and 70. It’s very likely you might like to come back and get a second bite.”

Since launch, there have been calls to let guidance staff talk to users about more than just pensions, and Guy agrees. “We’d also like to see slightly more tailored guidance, so if you are in a particular situation like divorce you might want to take different guidance and have a bigger picture.

“At the moment, one in four people we see through Pension Wise want referral on to the general Citizens Advice service because they have lots of other issues they want to look at. It would be nice if the guidance itself was pointing those things out. At the moment there’s a bit of a fence around the sessions.

“Now we have the experience we can push the definition of Pension Wise a bit. So there is a proper hand-off and people don’t feel like they’re being left on their own.”

Citizens Advice may be the new kid on the pensions block but the landscape is set to be rearranged again. In the March Budget Chancellor George Osborne announced a restructure of the organisations delivering financial guidance using public funds.

As a result, the Money Advice Service will no longer exist, and TPAS and Pension Wise will merge into a single pensions body.

Guy says: “It makes sense to have a more simplified public financial guidance landscape, including a new single body for pensions and a commissioning organisation for money and debt advice. What will be key will be how this is developed and how this will make a difference for consumers.

“We will continue to work with the MAS, the Government and the new bodies to make sure people get the pensions, money and debt help they need to plan and manage their finances.”

Of course, Guy is responsible not just for Pension Wise but the entire sweep of services offered by Citizens Advice. Guidance is delivered at over 3,300 locations in England and Wales – run by 338 individual charities – by around 22,000 volunteers in addition to 6,500 paid staff.

Despite the new pressures of being on the front line of drastic pension reform, you get the impression Guy is unfazed. A lawyer by training, she was chief executive of the London borough of Ealing before heading up charity Victim Support. Running local authorities and charities is “very similar,” she says.

“You are providing services to the public, you never have enough resource to do it and there’s always an increasing demand.”

Six years on from taking the helm at Citizens Advice, Guy insists she has no plans to move on.

“It’s one of the best jobs in the voluntary sector; it would have been very hard to say no. There’s the size, scope, breadth and it touches every community in the country.

“I felt like I’d grown up with Citizens Advice somewhere in the background of my life. It felt like an organisation with a worthwhile cause and there were things to be done. The question is: how do you make an organisation 76 years old fit for purpose for the future?”

If she can crack cheap, holistic, face-to-face pensions guidance, Guy will have made a very good start on that ambition.

Five Questions

What’s the best advice you’ve received?

On-the-ground evidence is priceless.

What has had the most significant impact on financial advice in the past 12 months?

The pension freedoms have altered how people can use their pension pot and for some people it has been the first time they’ve sought guidance on their retirement income and plans for the future.

What keeps you awake at night?

People’s needs are becoming more complex. For example, a debt problem can be inextricably linked to other issues such as health, housing and relationships. This is why it is really important Citizens Advice is able to provide a free, independent and holistic service.

If I was in charge of the FCA for a day I would…

Make sure consumers’ needs are at the forefront of all the decisions it makes. This includes in its enforcement work around bad business practices.

Any advice for new advisers?

Visit a local Citizens Advice. As people’s lives become more complicated, so do their financial needs.  There is a real opportunity for free to access and paid for advice services can work together so people get the right support.

CV

July 2010-present: Chief executive, Citizens Advice

April 2015 -present: Non-practitioner member, Banking Standards Board

July 2012-December 2014: Non-executive board member, NAO

May 2013 – December 2014: Chair, Audit Committee, NAO

May 2013-present: Chair, BBA Consumer Panel

April 2010-April 2013: Lay member, Sentencing Council

January 2006 -July 2010: Chief executive,  Victim Support

1994-2006: Chief executive, London borough of Ealing