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Treasury slashes Pension Wise budget

Pension Wise jenga

The Treasury has slashed the Pension Wise budget by more than a quarter, with advisers’ levy for the service set to drop by £2m.

Documents published by the FCA alongside its 2016/17 business plan reveal the budget for the existing guidance service will drop 27 per cent, from £39.1m to £28.7m.

The 2016/17 funding requirement has been further reduced by a £7.3m underspend in 2015/16, although an extra £1.2m will be charged to levy payers to cover the cost of guidance on the secondary annuity market.

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As a result, the industry will pay £22.6m towards funding Pension Wise in 2016/17, down 42 per cent from £39.1m the previous year. Advisers will pay £2.7m, compared with £4.7m in 2015/16.

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The decision to cut funding for Pension Wise comes after Chancellor George Osborne announced plans to replace the existing guidance services provided by Pension Wise, The Pensions Advisory Service and the Money Advice Service.

The new body will be in operation by April 2018 at the earliest, the FCA says, and will be funded through an industry levy.

The Treasury could not be reached for comment.

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Why?

    This is a service for the public good it should be paid for from the public purse not from stealth taxes on advisers

  2. Can I apply a treasury levy to re-coop the cost for any pension guidance or advice I give to people who come directly to me and bypass pension wise or any new body they plan to set up in 2018 ?

    Look out for my invoice (invoices) in the post George !

  3. Good job it’s Spring, we can all plant some more money trees!!

    I know our Pension Wise levy isn’t much on a business by business basis, but as Nick says, why do we need to pay a penny? The FCA fees weren’t so much 3 years ago, but that big fat FSCS levy has certainly crept upwards (as no doubt will the cost of Pension Wise advice).

    As an aside, I am bewildered as to why we have still not seen any movement towards stopping the sale of unregulated products by regulated firms (or a product levy, but a blanket ban is easier to implement), especially after the much lauded FAMR ‘opportunity for change,’ which didn’t even address this significant area of cost to the industry and customers alike. Maybe a fall in the workload would mean less jobs at the FSCS, I don’t know, you tell me?

    If firms or individuals want to sell packaged, unregulated crap, that I am sure in most instances is considerably removed from the client’s real appetite for investment risk anyway, go do it through another medium. Come on the FCA, it really isn’t rocket science and the pips are squeaking; do something really helpful and let’s get this debacle sorted, for the good of proper firms and proper clients, as we cannot keep paying for this nonsense.

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