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Pension Wise demand slumps as appointment costs rise

Pension Wise jenga

The number of Pension Wise appointments has been steadily falling since October while the cost per session has been rising, Treasury figures reveal.

Government statistics published today show there were 3,205 appointments in December, down from a high of 6,755 in October.

When the service launched, telephone sessions – run by The Pensions Advisory Service – made up the bulk of appointments.

But Citizens Advice-run face-to-face meetings now account for 76.8 per cent of all appointments, up from just 41.7 per cent in April.

The average cost of appointments has increased to £516 per session, a rise of 4.2 per cent compared to November.

Pension Wise is set to cost the industry £35m for 2015/16 with advisers contributing £4.7m.

In the first six months of the freedoms, nearly 400,000 people accessed their pensions but just 28,320 had a Pension Wise appointment.

To date 2.03 million people have visited the service’s website.

Hargreaves Lansdown head of pensions research Tom McPhail says: “The availability of impartial guidance is an important element of the pension freedoms, Pension Wise provides an excellent service and most people who do use it have a very positive experience, however overall usage numbers are still pretty low.”

He adds: “Policymakers need to improve the take-up or to make sure suitable alternative solutions are in place. Any pension investor should be able to receive good quality guidance and support from their pension provider because this is where most of them turn to.”

A Treasury spokesman says: “As you’d expect, the service faced a lower than usual demand in the Christmas period and the seasonal closure of Citizens Advice Bureaux meant there were fewer weeks in which to deliver appointments.

“The New Year has already seen an increase in appointments and visitors to the website.”

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Comments

There are 9 comments at the moment, we would love to hear your opinion too.

  1. Not bad really – a free appointment that costs an average of £516 in reality.

  2. Is it really newsworthy that appointment numbers were down in December? I guess it’s a no news day. But well said Tom McPhail.

  3. The cost of one hour with a qualified adviser would cost less then the cost illustrated above, this makes my blood boil.
    They say it costs £516 per session to have a chat, give a little guidance and NO ADVICE. Well not strictly true the advice is go see an Independent Financial Adviser if you don’t understand as we cannot advise you.
    We advisers are paying for this, why, this could have been arranged via the voucher systems we recommended and it would have been advice, not guidance.

  4. Just how long are these guidance sessions FFS? I don’t charge for initial exploratory meetings, hourly or otherwise, though if I did I suppose I’d set a rate of £150/hr. Assuming that Pension Wise works to something similar, a cost of £516 equates to 3.44 hours. For Christ’s sake, how can anyone make a guidance session with no advice last nearly 3½ hours?

    A horrendously inefficient use of industry money. Then again, since when did the powers that be ever give a flying fig about that?

    • I agree Julian – Pre RDR, we used to quote a minimum of £620 for research advice and implementation of an annuity and about 3 x that for advice related to pension drawdown as the risk amd work for drawdown was more, now the average cost for ADVICE is going up as those that pay for advie are paying for those getting FREE guidance!

  5. Amazing how costs soar when it isn’t their money to spend.

  6. I have just had some free guidance from MAS…I’m massively undercharging! Noted!

  7. £516 for a no risk, no liability, chat. Put me down for 4 a day for as long as the gravy train takes to hit the buffers.

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