The Pensions Advisory Service chief executive Michelle Cracknell has urged the Government to rethink plans to offer “face-to-face” guidance to savers when they reach retirement.
Chancellor George Osborne yesterday stunned advisers and insurers by announcing a radical overhaul of the pensions tax system.
The changes mean that from April 2015 anyone aged 55 or over will be able to take their entire pension pot as cash.
The Chancellor also guaranteed that people approaching retirement will receive “free and impartial face-to-face guidance”, funded by a levy on providers and trust-based pension schemes. The Treasury will also provide £20m to “get the initiative up and running”.
Cracknell says: “The most important announcement from the Budget was the referral to guidance. The Government cannot open up the gates and not produce any form of guidance for people to access.
“It is absolutely possible to deliver guidance because TPAS are delivering it already. At the moment we deal with 80,000 customers a year and we have 20 people on the helpline, so you can easily see how that can be scaled up.
“But all the research we have done suggests this shouldn’t be done face-to-face because most people do not want that. It is not convenient, it can be quite intimidating and people tend to be a bit embarrassed about what questions to ask.
“We think the delivery channel preferred by the public would be things like webchat and Skype. That makes it really doable and those are things TPAS does already.”
Advisers have warned making insurers responsible for providing retirement guidance could lead to bias.
Cracknell says: “I don’t think providers are the right people to deliver this, either from the skill set and experience they have or the public perception about what is happening and who is giving them the information.
“TPAS can be a delivery mechanism to make this happen. If we had to get in a car and see people one on one it would not be workable but I don’t think that is what most people want.”