The Work and Pensions select committee has called for industry-funded guidance service Pension Wise to be expanded six months after the launch of the retirement freedoms.
In its first report in this Parliament, the committee calls for radical improvements to the Pension Wise service.
The service should consider savers’ property wealth, benefit entitlements tax implications, care costs and debts, the committee says.
The conclusion echoes a submission to the committee from Citizens Advice, which saw the charity – which provides face-to-face Pension Wise guidance – bemoan the tight constraints of the service.
In addition to a broader service, the MPs describe the Pension Wise website as “not fit for purpose”.
The report says: “It is static, offering no opportunities for personalisation, and lags well behind many private services.” The committee calls for the implementation of tools like an income calculator, illustrative examples, and printable summaries “as a matter of urgency”.
Similarly, a pensions dashboard is described as “long overdue”, with the Government urged to publish an implementation timetable in its response to the report.
The committee also repeats its condemnation for the Government, which it says is failing to provide statistics on the performance of the pension freedoms.
Committee chairman Frank Field wrote to pensions minister Ros Altmann to demand data ahead of the inquiry, and the MPs have now recommended the Government publish quarterly statistics on customer pot sizes, take-up of guidance and advice, any reasons given for not taking up either, subsequent decisions taken and the reasons given for those decisions.
At the same time, the committee describes the lack of data as “unacceptable” and says a lack of information on the performance of Pension Wise is blocking both effective scrutiny and future policy decisions.
The committee says: “It would be fortunate in the extreme if such radical change operated as hoped without any need for adjustment. Regular collection and reporting of the take-up of guidance and advice options on offer, and the decisions taken is imperative.”
Finally, the committee slams opacity in the way the advice market is regulated, and in particular what the FCA deems to be guidance or advice, which it says “is a mystery to consumers and providers alike”.
But it has steered away from backing calls for a “safe harbour”, saying it had yet to be persuaded of the case for relaxing regulation.