Consumers who have used the free, government-backed pensions guidance service were overwhelmingly satisfied with the process, with 90% saying they it helped them to make an informed choice about their next steps.
Of those obtaining face to face or telephone guidance from the independent Pension Wise service, 49% went on to seek financial advice, according to research commissioned by the government.
Ipsos Mori surveyed almost 10,000 people between February 2016 and March 2017 as part of its research, including 7,967 people who had used the Pension Wise service and 1,857 people who had not. Of those who completed their appointments, 94% were satisfied with the service and 79% were very satisfied with the service. Almost all, or 97%, of respondents, said that they would recommend the service to others.
Those that had taken advantage of a Pension Wise appointment were better informed about the options available to them when accessing a pension than those that had merely used the website, or those that had not used the service at all. For example, when asked whether it was true or false that you can now leave your money in your pension pot to be withdrawn as and when it is needed, 76% of those that had had appointments answered 'definitely true', as opposed to 66% of those that had only used the website and 43% of non-users.
Similarly, 94% of those that had taken advantage of an appointment felt confident in their ability to avoid pension scams compared to 90% of those that had only used the website and 80% of non-users. Of those that had spoken to their pension provider since their Pension Wise appointment, 87% felt well prepared for these discussions compared to 88% of those that had obtained their information from the website and 76% of non-users.
Pension Wise has delivered more than 167,000 appointments since it began operating in April 2015, 70% of which have been delivered face to face and 30% over the telephone. However, the Financial Conduct Authority (FCA) reported last year as part of its Financial Advice Market Review (FAMR) that only 7% of those aged 55 or over planning to retire in the next two years had taken advantage of a free appointment.
The service was introduced in April 2015, at the same time as members of defined contribution (DC) pension schemes were given more flexibility over how to access their savings. It provides free, impartial guidance to those aged 50 and over that have not already accessed a DC pension via face-to-face appointments, delivered by Citizens Advice, and telephone appointments, delivered by the Pensions Advisory Service. It also offers online information and guidance via a website.
Pension Wise appointments last between 45 and 60 minutes, and provide consumers with a full explanation of the different ways in which they can access a DC pension and the pros and cons of each one. During the appointment, a guidance specialist will help the consumer to clarify his or her next steps in the decision-making process, including questions to ask pension providers and information on shopping around. Consumers then receive a document summarising the appointment within 48 hours.
The House of Commons Work and Pensions Committee is currently reviewing the impact of the 2015 pension reforms. As part of its inquiry, it is seeking views on whether savers are taking proportionate advice or guidance before making financial decisions and, if not, why not. It is also seeking views on whether reforms are needed to Pension Wise and what role, if any, is being played by automated advice and guidance services to address 'gaps' in the pension advice market.
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