The Treasury favours involving providers in delivering Chancellor George Osborne’s retirement guidance guarantee amid fears the service could “fall over” if there is significant demand next year, Money Marketing understands.
The Chancellor promised that everyone will receive “free, impartial, face-to-face guidance” when they reach retirement during his Budget speech in March.
The commitment is designed to support radical liberalisations that mean anyone aged 55 or over will be able to take their entire pension pot as cash from April next year.
However, the question of how the guidance should be delivered has divided the industry. In March, Money Marketing revealed two major providers had raised the possibility of quitting the Association of British Insurers if the trade body did not insist the guidance is offered independent of members.
Money Marketing understands Government officials have held talks with senior industry representatives in recent weeks during which it was made clear that the Treasury favours providers offering guidance to savers.
One senior industry source says: “If you are a civil servant then you just need something pragmatic that means you have delivered what the Chancellor promised.
“The Treasury is terrified millions of people are going to ring within months of the guidance launching.
“They see a systemic delivery risk that if we have a single utility to deliver the guidance and demand is strong it will fall over. Therefore they want to lean on the providers to make sure it works.”
Another source says: “The Treasury wants providers involved. Their priority is delivering a system that is sufficiently robust by April 2015.
“Ultimately the Treasury feel they need to get a something in place so they can say Osborne has stuck to his Budget pledge.”
Syndaxi Chartered Financial Planners managing director Robert Reid says: “I do not think providers have the skill set within their own staff to run a service like this.
“This is about the Treasury wanting something to succeed because there is an election next year. It is nothing to do with the quality of the service provided.”
A Treasury spokeswoman says: “No decisions have been taken. We’re committed to impartial and consistently high quality guidance and are currently consulting on the delivery model that will best achieve this. We will publish our response in due course.”