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Nic Cicutti: Pension Wise is going the way of the MAS


Is there anyone else out there who feels, like me, that the Government’s strategy with regard to Pension Wise is becoming muddled, possibly even dangerously so?

In the past few weeks a number of issues have raised their heads, to the point where it is no longer clear what the true purpose of this advice/guidance service really is, or to whom it is intended to reach.

When the Chancellor announced his pension reforms last year, most observers and practitioners – other than the most paternalistic, who preferred the old annuity system because it delivered “certainty” over long-term retirement incomes – felt there were some positive elements to them.

The opportunity to access a slice of one’s pension savings more easily than before was welcome to many, even those unlikely to make use of it. It meant that in the event of a genuine emergency a pot of money could be available, albeit at the cost of having to hand over some of that cash to the taxman.

Of course, there were dangers to the process, as we all knew. It raised the potential of people asset-stripping their pension pots in search of a short-term financial fix, oblivious – or a least downplaying – the long-term consequences of such a move.

Pension Wise was meant to be the antidote to this. Offering a combination of online, telephone and face-to-face guidance, it was meant to provide the factual information that a soon-to-retire person might need when considering his or her pension options.

The problem with Pension Wise was always that, despite attempts to persuade the Treasury otherwise, it only offered generic guidance as opposed to advice. There is no direct pathway to the kind of person-specific advice which most of the 400,000 annual retirees will need when they finally stop work.

Moreover, as my fellow Money Marketing columnist Robert Reid explained in his recent piece, some providers are dragging their heels in terms of providing the kind of service their policyholders have a right to expect.

The result is some would-be retirees are obtaining information from Pension Wise, deciding on a course of action – hopefully the correct one – and then roping in advisers to make good on the admin omissions of providers themselves.

This puts advisers in an invidious position. When Robert chased up a provider on behalf of a client, was this an advised or an execution-only service that he was providing? And what happens if, based on Pension Wise information, a client makes what many might consider to be a wrong decision and then calls an adviser to help sort out the provider’s admin failures?

What is even more deplorable is the way the Treasury initially refused to give any kind of detailed information on early take-up of Pension Wise’s services.

Since then it has doled out a few snippets: Pension Wise has, we are told, provided 18,000 “guidance appointments” since its launch in April. But it declined to clarify whether these “appointments” were face-to-face meetings with Citizens Advice or calls to The Pensions Advisory Service.

More than 900,000 unique visitors accessed Pension Wise’s website, we are told. But again, there is no indication as to how long they browsed the site, how many pages they looked at, or what their “journey” was through the site. Critically, we have no idea about the actions they took after their visit.

A year or two, when the Money Advice Service was issuing its own dodgy statistics about users of its website, I was one of many critics who tore into the MAS for giving incomplete and possibly misleading information about its use. It looks increasingly as if Pension Wise is travelling down the same route.

To make matters even worse, even as it is unclear who is using Pension Wise and what they are doing as a result of it, the Government has decided the organisation’s service will be widened to a large cohort of users, no longer just those 55 or older but now anyone aged 50-plus.

I have nothing against a pensions advice service for all over-50s. I am totally in favour of anyone approaching retirement being able to access information, both general and person-specific about their retirement options.

I would be happy if Pension Wise acted as an “introducer” to the kind of genuine advice a client might need on how to make the last years count for them financially before they stop work.

But it looks instead very much like the Government is engaged in a strange form of mission creep. It is using Pension Wise in a manner for which it was not intended in order to take up the slack caused by a lack of potential users among those coming up to immediate retirement.

This lack of clarity needs to end. Last month the newly-elected and highly respected Commons Work and Pensions committee chairman Frank Field said he would be launching an inquiry into the effectiveness of Pension Wise. He is right to do so. The separate advice review announced by the Government this week will also need to shed light on whether guidance is working.

For the pension reforms to work proper advice must be made available and take-up of that advice should be high. Without it millions of pensioners risk an uncertain financial future in the decades to come.

Nic Cicutti can be contacted at



Robert Reid: The break in the Pension Wise chain

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MPs to launch Pension Wise and advice inquiry

The Work and Pensions committee is to launch an inquiry into Pension Wise and the availability of advice in the wake of pension freedoms. MPs will probe both the quality of service available through Pension Wise and the availability and affordability of financial advice. In particular, the committee will look at whether people are adequately […]


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

  1. John Hutton-Attenborough 6th August 2015 at 3:01 pm

    Nic. Is this problem better or worse because of the unintended consequences of RDR?

  2. From the inquires I have seen the pension wise service is directing people to unbiased and then to us – a sort of sign post system.

    However Nic you are right in that people are taking actions prior to speaking to us on all but the safeguarding issues like guaranteed annuity plans. By the time they see me they just want us to deal with the GAR and ‘they will sort the rest’. The only reason that happens is because of safeguarding limitations.

    I can tell you without all the regulations/red tape and FCA guidance notes I will have to tell this lady ‘sorry but dont do this’. Pensioner poverty calls.

    In all this is a disaster in the making and I can see a day when this sort of client calls on FOS for compensation because they did not understand the issues – even though she is a qualified accountant.

    God help our FCSC fees then

  3. Governments believe that mass market cheap solutions work, remember Stakeholder? What they do not realise is that the layers of successive legislation have made it almost impossible for the average consumers to understand the options available to them, at a time when the availability of qualified advisers does not match the demand.

    I believe that there is a recognition that advice is important, but dressing it up as guidance to cut costs is failing the consumer, and cheating advisers who help pay for it.

    We can all research online, obtain information, follow decision trees, but many still want professional advice before taking a decision, which costs money, and is usually worth it. Until Governments and Regulators grasp this concept, advisers will always be seen as an unnecessary cost to consumers.

  4. It is like all other Government quangos: Self serving money pits with the sole objective of being as expensive as possible. After all the more expensive you are the more important you are in quangoland. First they set up and secure the need (or perceived need) for the quango (with initial financial resources). 2nd they ensure difficulties are created during embryonic stages that “need overcome if they are to carry out their role (with more financial resource). 3rdly they tell the government that they need to take on wider range of activities as “research” shows that if they “X” then they should be able to provide Y & Z to make the service more rounded (which will require more financial resource). Lastly demand additional financial resource to ensure that they are able to recruit and retain the type of employee that the Government would wish to have in this, the most important quango, to fulfil its role. The Government will be more than happy to allow this to manifest itself into some huge thing that becomes so useless at doing what it was supposed to because it doesn’t cost the Government a dime. It is industry funded. The gravy train expansion is then so set on its tracks that it is unstoppable.
    Does this step by step growth of a quango ring any other bells to anyone?

  5. William Burrows 6th August 2015 at 5:27 pm

    There seem to be a number of issues rolled into one and I think Nic avoids the wider point; the advice gap is much bigger and more serious than the Government and FCA dare admit to.

    My observations on this article and the issues more generally are:

    1 I understand the telephone based service from Pension Wise is very good – the quality of the information given reflects the experience of the consultants employed

    2 I do fear that many people don’t know the difference between guidance and advice and so there is potential for people to think they have received enough information to make an informed decision when in fact there are huge gaps in their understanding which can only be put right by getting regulated advice

    3 I think there is a future for Guidance but it should be positioned as a service which prepares people for the advice process and finds a way to match clients with suitable advisers rather than pointing them to the equivalent of the “yellow pages”

    4 There may be something fundamentally missing from the present set up – “What is it that people actually want?”

    In my experience, most people want to deal with someone who can help them from start to finish, who has the right level of knowledge and skills and they can trust. They also want someone who can actually deal with practical side of implementing whatever has been decided. I should probably add – someone they can sue if it all goes wrong

    In the final analysis it might be best for the industry to start with a clean sheet and work out what people actually want and what type of service will result the best outcomes rather than try to patch up a system of rules and regulations that seem to get in the way of people getting the service they really need.

  6. Much of this mess could have been avoided if, instead of announcing that anyone can just cash in as much as they want of their pension fund/s, the government had:-

    1. Capped annual pension fund withdrawals and

    2. Instead of issuing 4% p.a. guaranteed pensioner bonds, issued a tranche of 4% p.a. Gilts available exclusively to annuity funds.

  7. Nic,

    I think you might find this analogy pertinent.

    The MAS is not too dissimilar from the NHS 111 telephone advice service. I have to say that if I am unwell or have a medical concern I’d far rather go to my GP that use this service – which I perceive as a very second best option.

    So with MAS. As has been mentioned the new ‘freedoms’ and all that goes with it are complicated and do require informed and expert advice if a satisfactory outcome is to be achieved. Furthermore in our blame culture society there is some comfort for the seeker of advice (rather than guidance) that those who they may consult are properly trained and regulated and redress would be available for careless or flagrant advice.

    However the Government and their attendant bureaucrats, as always, want it both ways. Advisers must be better qualified and become more professional (quite rightly) and then they complain that the majority can’t afford the advice. It is beyond me why advisers have to be so shabbily treated. Will the government pull down the accountancy and legal monopolies and transplant them with telephone ‘guidance’. I would love to see the auditors and the barristers’ reaction to that!

    Perhaps in retrospect the fiddlers should have left well alone and merely increased the triviality to (say) £50,000. For the larger pots drawdown could have still sufficed.

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