Advisers have hit back at pensions minister Ros Altmann's suggestion that providers are to blame for the low take up of Pension Wise.
Last week, a survey commissioned by Zurich showed that only 4 per cent of those aged 55 plus in defined contribution pension schemes have spoken to Pension Wise.
Matthew Phillips, managing director at wealth manager Thomas Miller Investment, refuted Ros Altmann’s comments that the industry had not done enough to promote the guidance service to those reaching retirement age since April’s pension freedoms.
He said: “The recent interview blaming pension providers for the low take up of Pension Wise is missing the point and seems to be wilfully blind to what many in the profession had highlighted before,” he commented, adding that the service was rushed through, not thought out and not well planned.
“We have said that before and no one should be surprised at the poor take up.”
He argued the reason Pension Wise is not hitting targets is a mixture of poor government planning, with providers, “who let’s remind ourselves are commercial enterprises with shareholder responsibilities, having been left to pick up the slack”.
Gary Smith, financial planner at Tilney Bestinvest, said he disagreed with the inclination that pension providers are not doing enough to promote Pension Wise.
“Indeed, from our experience we believe that pension providers have been proactive in this area, as well as highlighting the potential for pension scams and that their pension benefits include any valuable pension guarantees that would be lost by utilising the pension freedoms option.”
He stated the actual requirement for Pension Wise could have been avoided altogether if the government had retained a minimum guaranteed pension income requirement to qualify for pension freedoms, which was previously £12,000 per annum.
“The suspicion remains with many in the pensions industry that the introduction of pension freedoms for all was a short-term strategy to increase the income tax revenue for the government as part of its deficit reduction agenda, with little consideration on the long-term impact for retirees with relatively small pension pots.”
Mr Phillips called for a commitment from government to leave pensions alone, to allow the providers, advisers and clients to get used to changes and plan properly.
“Government should also take responsibility for providing clarity about what Pension Wise is, and possibly introduce some set wording that must appear at the top of communications from providers.”
He also said there should be better plans to encourage the take up of financial advice. “This is constructive. Simply blaming some of the largest stakeholders is not.”
Last week, the former pensions minister Steve Webb admitted that Pension Wise has “not got the coverage we would have hoped” and in hindsight, wondered whether the money would have been better spent on some form of “cheap advice” via a voucher system enabling consumers to see an actual adviser.
ruth.gillbe@ft.com
