The clock is now officially ticking. In less than a month pension freedoms will be with us, and alongside them, the Pension Wise guidance service.
To be honest, it is amazing the industry has got to this point at all. Preparing for the biggest shake-up to pensions for a generation is no mean feat, and the political drive to get the reforms away before the election has meant coping with extremely tight timescales to roll out what should have been at least a two-year project.
Now seemed as good a time as any to see what the people charged with delivering the guidance service actually think about critical issues such as expected take-up, capacity and general readiness for a potential surge in demand.
Alas, it wasn’t to be. Having interviewed the chief executives of The Pensions Advisory Service, Citizens Advice and the Money Advice Service, which is supporting the Treasury in delivering the online element of Pension Wise, all were tight-lipped on the above. They have clearly been briefed to toe the party line that everything will be fine. Money Marketing’s separate attempts to gauge expected demand for the service through Freedom of Information requests have also been thwarted. It was a case of: “We have the numbers but are not telling you.”
Perhaps the guidance framework is robust enough to cope post-April. But it is worrying that we are not being allowed to judge this for ourselves.
Elsewhere, some very influential people are starting to sound the alarm. In January, FCA chief executive Martin Wheatley questioned whether guidance would lead savers to the right outcome, and raised concerns about unsuitable Budget products coming to market too quickly.
Insurers themselves say “critical pieces of the jigsaw are missing”, including basics such as the phone number for Pension Wise and what a session will look like in practice.
Even pensions minister Steve Webb is concerned about capacity when the new freedoms kick in. He told Money Marketing he expects the blockage to occur with providers rather than the guidance organisations but he is clear in his expectation of a surge in demand.
Last June the Association of British Insurers estimated guidance take-up could range from between 200,000 retirees to 400,000 (with the worst-case, low response scenario predicting just 25,000). With weeks to go, we are still nowhere near knowing at what end of the scale the actual number of guided customers will end up.