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.