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MM leader: Citizens Advice is weakest link in Pension Wise chain

Natalie Holt, journalist with Money Marketing Photo by Michael Walter/Troika

Over recent months, Money Marketing has been constantly chipping away at the Treasury and the FCA for information on how Pension Wise is performing. Numerous Freedom of Information requests ranging from the expected take-up of the service to action against firms pretending to be connected to Pension Wise have been rebuffed, either because it did not suit the Government’s timetable or simply because policymakers did not want to tell us.

But this week we can finally reveal some meaningful data on whether the guidance service is up to par.

There are some encouraging nuggets in the figures, with over a third planning to seek out advice following a guidance session. But the data also raises some serious warning flags, particularly around the different outcomes experienced by savers depending on whether they use The Pensions Advisory Service or Citizens Advice.

The numbers do not look good for Citizens Advice. Not only are consumers less likely to see an adviser following a face-to-face guidance session, they are also less likely to shop around when it comes to retirement income.

The silver-lining types may suggest this is because Citizens Advice delivered such a comprehensive service that savers had no need to go elsewhere, or that retirees already knew what they wanted to do with their pension pot.

But the fact is those who go to Citizens Advice for pension guidance are more likely to seek out additional information elsewhere.

Worryingly, the data points to a pensions guidance lottery, with those going to TPAS left better informed, more likely to see an adviser, and more likely to shop around.

With a £12,000 pay gap in some cases between TPAS and Citizens Advice, and with pensions experience not insisted on by Citizens Advice, the gap between the two organisations is becoming more like a chasm.

The official party line when it comes to defending Pension Wise’s honour leaves a lot to be desired. Both Citizens Advice and the Treasury claim Pension Wise is a “real success story” and that “satisfaction remains high”.

But many consumers have nothing to benchmark guidance against. How would they know if the service they are getting can be better delivered by someone else?

One of the driving factors behind Citizens Advice being chosen as a Pension Wise delivery partner was that the Money Advice Service, a money-guzzling quango that failed to get a handle on consumer outcomes, was not up to the job. Dare I say it, there is a real risk of history repeating itself.

Natalie Holt is editor of Money Marketing. Follow her on Twitter: @Natalie_Holt_MM 



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There are 8 comments at the moment, we would love to hear your opinion too.

  1. Congratulations to Money Marketing on dragging some Pension Wise performance data out of the government. I hope the DWP will be much more transparent about the measurement and reporting of the guidance service in future, as this will allow everyone who cares about good customer outcomes to get behind it and help to make further improvements. It is very likely that people opting for face to face guidance through Citizen’s Advice are less financially confident in the first place than those who contact Pension Wise over the phone. This may well account for the disparity of outcomes, at least in part. But we can’t ask these questions and take action to improve matters if the government squirrels the information away.

  2. Natalie

    You are doing it again. Two articles on the same topic. Mark Sands had a piece: “The Guidance Lottery” and this is substantially the same. Apart from filling space what is the point?

    As I said in Marks article:

    Perhaps a telling point is that those in TPAS get some sort of pay while those in CAB are all pro bono. Yet again it would seem – you get what you pay for.

    • Harry you have repeated your error so will answer here – those employed by CA to deliver the Pension Wise service are employed not volunteers.

      • I’m pleased to be corrected, but I must have had an odd experience. I volunteered to Pension Wise only to be told they had sufficient, but that I could apply to the CAB on a pro bono basis. They too didn’t get their act together and never came back to me.

  3. Can I be brutally honest and say, all this (pension wise and CAB) guidance is just a vehicle for GO to demonstrate he has offered the “advice” channel he promised and even better he doesn’t have to pay a penny towards it !!

    Its all a very expensive facade, to save face, and a road that always leads to the same destination……….go see a proper independent financial adviser !!!!!

    • D H….What a perfect idea…..can you therefore help everyone that can’t afford to see an IFA by providing us all with a database of those IFAs that are willing to offer a full service to the c£1,000 – £30,000 pension fund value clients, ideally for a fee of say less than £100 (that will help the c£1k – £5k fund value clients especially)….I’m sure they will become very very busy and it will help them get their PW fee back.

  4. Philip Loney makes a very fair point about the type of people who are more likely to opt for CA rather than TPAS. MM does seem to be leaping to a lot of conclusions, which are not substantiated.

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