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Pension Wise could be extended to cover property

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The Government may have to explore expanding the scope of Pension Wise sessions to include property, one of the new guidance service’s delivery partners has hinted.

The Pensions Advisory Service head of information and guidance Charlotte Jackson says property is “one of the areas that very early on we need to do some work on”.

TPAS – which delivers Pension Wise’s telephone appointments – has told the Treasury that the first wave of users have been asking about using their pension fund for property and enquiring about defined benefit transfers, Jackson said at the Money Marketing Retirement Strategy Summit in Luton last week.

But she said the guidance service is ill equipped to deal with these more complicated issues.

She said: “There are a number of people who are looking at using their money to pay off their mortgage or to buy a second home.

“Property is a much bigger factor than I think any of us ever thought of at the beginning of this journey. At the moment it’s touched on [during Pension Wise sessions], we can talk on it to a degree but it’s a complex subject area so it’s one where we’d be telling people to go and take financial advice.

She added: “Because this is a new landscape, some of this stuff is only just starting to come out.”

Jackson said the organisation is expecting “further developments” on the service in the next six months.

She added that the normal TPAS helpline has received a “massive increase” in complaints relating to people’s experience of the retirement risk warnings providers are required to give customers.

Customers are misunderstanding providers’ warnings, she said, and assuming that they have to take financial advice when they are only being made aware of the option.

“We have an issue about being better at giving clearer messages about what the process is and on what basis people have to go and see a financial adviser'” she said.

“Some of those experiences aren’t being as consistent as we need them to be.”

This month Money Marketing revealed how providers are struggling to implement the ‘second line of defence’ requirements.

The Pensions Regulator has issued conflicting guidance to the FCA over the nature of the warnings given to customers. TPR says warnings should be generic to avoid straying into advice, while the FCA wants providers to give relevant “tailored” guidance.



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

  1. Another example of the legislation not being thought through here I think.

  2. Taking money out to buy a property is not complicated. Don’t do it unless you want to pay A LOT in tax.

  3. Andrew Whiteley 11th June 2015 at 3:33 pm

    Nonsense. The Pension Wise remit is to give guidance on the way that benefits can be released from a pension scheme and the associated tax treatment. If a client wants to invest the net funds into property then it is down to them to ascertain the likely risks and rewards from that through independent research or by paying for advice!

    What if they want to buy a new car? Will the service have to be expanded to offer “guidance” on that too??

  4. If it keeps “jobs for the boys” Andrew, yes.

    To paraphrase. “We thought we’d set up a cheap service, paid for with other people’s money, to stop the public being ripped off by those nasty advisers. Now we realise it is more complicated than that as we never had a clue in the first place.”

  5. Trevor Goodbun 11th June 2015 at 4:32 pm

    I would like to transfer all the funds out of my DB pension, can I have some advice on what lottery numbers should I pick this weekend

  6. Peter Gallagher 11th June 2015 at 9:09 pm

    pension Wise agents do a lot of handoffs/signposting anyhow; on scheme special features, tax, welfarenbenefits, scams and financial advice as it is just guidance.

  7. headbelowthe parapet 12th June 2015 at 2:01 pm

    looks like a bit of empire building – parkinsons law bites once more

  8. I presume what they are saying is that investors are considering the merits of disinvesting their pensions (historically used to provide lifetime income) to buy a substitute method of providing that income and are therefore calling to discuss the merits and disadvantages of such.

    Whist this doesn’t need to stray into advice, it certainly strays into subjective views (the risks involved with property as an invesmtent) in addition to the objective facts (pensions are tax efficient and liquid vs. ptoperty are typically less so). Furthermore you can’t discuss the merit of cashing in the pension without factoring in the thing they are considering (which perhpaps by this stage is now bordering on advice)

    Add in the (typical) need to take on some debt to finance property and it’s getting into a bit of a ‘non-advised nightmare’

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