Personal Pension  

Further £20m put aside for pension freedoms guidance

Further £20m put aside for pension freedoms guidance

A further £19.5m is to be allocated to the pension freedoms guidance services in the coming financial year, according to documents published in the wake of today’s (18 March) Budget.

The document said that the funding will extend the availability of the state pension statement and pension tracing services, as well as provide additional resource for the industry-funded free guidance service Pension Wise.

Speaking to FTAdviser, a Treasury spokesperson confirmed the £19.5m would come both from the Treasury and potentially the levy on financial services firms, including advisers. The spokesperson said that the new allocation would not change any figures previously published.

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The total initial estimate for the FCA-administered levy for Pension Wise in 2015 to 2016 was £35m before today’s Budget was released.

Beyond the Treasury set-up costs, this annual cost will be met through an industry levy, with advisers paying about half of the amount being levied on other FCA funding blocks and being asked to pay £4.2m for the coming financial year.

Despite the fact that the extra £19.5m allocated to pension freedoms today does not include an additional levy for advisers, if it implies more money than the original £35m will need to be allocated to Pension Wise in future years it could spell an increase in future levies.

The spokesperson could not confirm how much of the £19.5m would be allocated to Pension Wise.

The government said the money will also put in place the need to draw on the Department for Work and Pensions resources to help manage any initial spike in demand for the service.