Follow the money: Pension Wise row deepens after employee dismissal

A former financial adviser who became a Pension Wise guider as a career “swansong” has been sacked by a Citizens Advice branch following a row over how guidance staff are being used.

The case shows issues uncovered by Money Marketing last month at another bureau have spread to other offices delivering face-to-face Pension Wise appointments.

Shadow pensions minister Labour MP Nick Thomas-Symonds says the Government urgently “needs to get to grips with Pension Wise”, while advisers are calling for an independent inquiry “to find out what is really going on”.

The Government-backed guidance service is funded by a levy on financial services firms expected to benefit from the sessions, set at £39.1m in 2015/16. Advisers will contribute £4.7m in the first year, while the Treasury provided a £20m start-up grant.

Yet out of around 200,000 who are known to have used the new pensions freedoms, just 10 per cent have taken up the offer of a Pension Wise appointment.

So, is Citizens Advice up to the task of running appointments across its network? Does the Treasury have a good enough understanding of how the Pension Wise budget is being spent? And can the guidance service, the key safety feature of Chancellor George Osborne’s landmark pension reforms, survive in the face of growing political and industry dissatisfaction?

“Isolated incident”

Last week, Pension Wise agent Trevor Gibbons was dismissed from the Staffordshire South West Citizens Advice branch after a two-week suspension for refusing to undertake non-Pension Wise training.

Gibbons feared his delivery centre would follow in the footsteps of Derbyshire Districts, which last month Money Marketing revealed had been using staff funded by the Treasury on work unrelated to pensions.

Citizens Advice said the Derbyshire case – which saw Pension Wise workers redeployed on general enquiries and providing debt guidance – was “an isolated incident”.

Minutes of meetings in July and August, seen by Money Marketing, show management at Staffordshire planned to ensure all Pension Wise staff were working towards the Certificate in Generalist Advice Work and a “programme of additional training outside the scope of Pension Wise”.

The rationale behind the move was “while the volume of clients has increased, the number of appointments was still lower than initially anticipated, leading to spare capacity within the team”.

However, a Citizens Advice spokeswoman says despite the extra training, there was never a plan to redeploy staff onto general Citizens Advice work.

The minutes report uneasiness among staff that “the Treasury may take a negative view of funding being used for purposes other than Pension Wise”. The spokeswoman says: “Citizens Advice Pension Wise staff are specifically dedicated to working on the pensions guidance service. Each Pension Wise delivery centre across the Citizens Advice network has confirmed that staff are only working on Pension Wise.

“Citizens Advice Pension Wise staff may be asked to undertake additional training if it is of relevance to their role as guiders, as agreed with HM Treasury. The additional training means the service better supports consumers, with staff able to identify people who might need extra help on issues like benefits or debt and can refer them to services which can support.

“Delivering the Pension Wise service takes precedence and any training is completed when a staff member isn’t busy with guidance sessions. Additional training is not to enable guiders to deliver any service other than Pension Wise.”

Gibbons was dismissed by Staffordshire following a disciplinary hearing. A letter from panel chair Claire Davis, seen by Money Marketing, shows he was sacked primarily because his refusal to undertake training was deemed gross misconduct.

Davis says: “The redeployment of staff onto general CAB work was never the intention and this has been explained to you on several occasions. Given the Pension Wise caseload was far below anticipated, the management felt there was scope for additional training and that closer involvement in the CAB service would have benefits in both directions.”

She adds allegations of misappropriation of Treasury funds were “groundless” in the case at Staffordshire.

Gibbons says: “Delivering the face-to-face pension guidance was a perfect fit, a way of giving something back by helping people understand their pension options and I got great satisfaction from it.”

He adds: “If I had known that CAB was going to force me to train as a generalist adviser while being employed as a Pension Wise guider I would not have taken the job on.”

Advisers are calling on the Government to place the service under renewed scrutiny.

Wingate Financial Planning director Alistair Cunningham says: “It reminds me of when you get to April and May and you can’t drive anywhere because the council are digging up holes in the road because they have to spend their budget and if they don’t the budget gets cut. I wonder whether a similar thing is happening with Pension Wise.”

Syndaxi Chartered Financial Planners managing director Robert Reid says: “We need an independent inquiry to find out exactly what is going on here. This can’t be swept under the carpet.”

One in 10

The problems at Derbyshire Districts and Staffordshire South West both stem from the low take up of the guidance service since it was launched in April.

Following a pilot run by Legal & General in October 2014 which found just 2.5 per cent took up the offer of guidance, experts warned it was likely to be running under capacity.

FCA and Treasury figures show just one in 10 people who have used the Chancellor’s pension freedoms exercised their right to a 45-minute appointment.

More than 200,000 people accessed their pension in the first three months of the freedoms.

But while the Pension Wise website attracted 1.5 million unique users, only 20,000 people received telephone or face-to-face guidance.

Despite fears of low take-up, the Treasury increased the levy to meet running costs for the first year of the service a month before the freedoms came into force. In January the figure stood at £35m – in addition to a £20m start up grant provided by the Treasury – but this was raised to £39.1m in March.

A wide range of FCA-regulated firms, including life insurers, portfolio managers and financial advisers, are contributing to the levy with the exact amount calculated based on their “potential benefit” from the service. Advisers are contributing 12 per cent, or £4.7m.

Apfa director general Chris Hannant says: “The organisations running Pension Wise need to give confidence to those paying the bills the money is being used for the right purpose. Working out which groups are benefiting won’t be an exact science. You can look at things like changes of money on deposit or if annuity or drawdown sales have gone up or down but it will be slightly rough and ready. It’s much tougher to track if the people going through Pension Wise are leading to more people going to advisers in the long run.”

Service creep

In its first report in this Parliament, published in October, the Work and Pensions committee said Pension Wise should be expanded.

MPs say it should consider savers’ property wealth, benefit entitlements, tax implications, care costs and debts.

The service has already grown from its original design. In July, Money Marketing revealed the Government was widening eligibility from over-55s to over-50s and scrapping a two-week pause between bookings and appointments.

The Pensions Advisory Service chief executive Michelle Cracknell has previously said her staff – who provide Pension Wise appointments over the phone – have had training from the Council of Mortgage Lenders in response to an increase in users asking about housing issues.

Reid says there may need to be changes to the way the service is funded. He says: “There has been service creep for a while, without a tremendous amount of thought. We’re heading towards an FSCS situation where you’re levying costs dependent on use, so if people need more help on debt than straightforward pension issues, the banks pay more. Maybe that’s a more elegant solution. Otherwise advisers will start thinking why should I pay when lenders, for example, aren’t? If no one’s using it we shouldn’t be paying for it.”

Bill Land quit his post as project manager at Derbyshire Districts when his team of guiders were put onto rotas that included non-pensions work. He says rather than redeploying staff, the bureau should have put more resources behind promoting the services.

In the run-up to the reforms the Treasury’s marketing campaign was cut short by purdah, with television adverts being pulled for nearly two months around the general election.

Land says: “I’ve got project management experience across lots of different industries. I would have been advising that we have a very open discussion with the Treasury and say this is the situation, what can we do about it? Not, as has happened at Derbyshire, let’s keep this to ourselves and redeploy people.

“There’s no way the contracts can be changed because people signed up for a year but there could have been some renegotiation. There also needed to be a big promotional push. Our guidance workers were doing three or four appointments a week, so we got them speaking to local employers and local organisations.

“I’ve worked with Government departments before but Citizens Advice and the Treasury is probably the worst combination I’ve come across. The organisation also has the embarrassment of funding a programme nationally where each appointment is costing about £500 because there are so few appointments happening.

“The issue is they are all run as separate charities and the fact is charities are run very differently to commercial businesses. When I came along I wanted to run it more akin to a commercial organisation – which is what the Pension Wise workers expected as former professionals themselves.”

Labour shadow pensions minister Nick Thomas-Symonds says: “The Government needs to get to grips with Pension Wise. The Work and Pensions committee report criticised Pension Wise, stating its website is “not fit for purpose” and its guidance is “currently too narrow for too many consumers”. It also needs to provide effective oversight and scrutiny of how it is being run.”

Pension Wise is due to move from the Treasury to the Department for Work and Pensions by April 2016.


January: Government guidance service named Pension Wise

January: Levy set at £35.1m for 2015/16, advisers will contribute £4.2m

March: Levy raised to £39.1m, advisers will contribute £4.7m

April: Purdah restricts advertising campaign as service launches

July: Government expands Pension Wise from over-55s, to over-50s

September: FCA figures show over 200,000 have used the freedoms since April. HMT says 20,000 people have had Pension Wise appointments

October: MM reveals Derbyshire Districts Pension Wise staff have been redeployed on other activity because of low appointment take up

October: Work and Pensions committee says Pension Wise should be expanded beyond pensions and brands the website “not fit for purpose”

November: MM reveals Staffordshire South West guider is sacked after refusing to undertake non-pensions training

Inside Pension Wise

I joined Pension Wise to deliver the face-to-face pension guidance through Citizens Advice Bureau in Staffordshire and although employed by them, I was well aware the funding to provide the service came from the Treasury and the industry.

I started in March and was on a one-year contract, which would automatically end on 31 March 2016. I was a full-time guidance guarantee agent on an annual  salary of £18,000, which was the bare minimum they could pay me. However, I did not see this as a long-term career but something that may last for a couple of years or so.

Joining Pension Wise was supposed to be the “final swansong” of my career, having spent 33 years working in financial services and taking early retirement at 59 last year. As a professionally qualified person and like many other financial advisers I have an array of CII qualifications, as well as the QCF Level 4 Diploma.

I am used to dealing with people “of a certain age”, those who were retired or coming up to retirement and my clients always used to say I explained things in a way they understood.

Delivering the face-to-face pension guidance seemed like a perfect fit, a way of giving something back by helping people understand their pension options and I got great satisfaction from it.

In July I became aware that the Derbyshire Pension Wise delivery centre staff had begun working on other Citizens Advice generalist work, which in my opinion was not what the Treasury funding was for. Money Marketing reported this and Citizens Advice at national level said it was an isolated case and all staff were now only working on delivering the Pension Wise service.

However, at the same time my own delivery centre, Staffordshire South West, had put together a weekly training rota, which was outside the scope of Pension Wise.

I refused to do this, stating they should not be using Treasury funding for non-Pension Wise activities. Because of my refusal I was immediately suspended and subsequently dismissed for gross misconduct.

If I had known Citizens Advice was going to force me to train as a generalist adviser while being employed as a Pension Wise guider I would not have taken the job on.

Treasury funds should not be used for anything other than what they were intended for, delivering Pension Wise guidance.

Trevor Gibbons is a former adviser and Pension Wise guider