Pension providers are reporting that just over four months after the at-retirement reforms came into force, only around a quarter of clients that contact them do so after having used the government’s free guidance service Pension Wise.
The Pensions Advisory Service operates remote guidance services and Citizens Advice Bureau offers face-to-face services.
FTAdviser contact a number of firms, finding that after the initial rush of people wanting to get their hands on pension pots, guidance service users rose and stablised at around 25 per cent.
Robert Cochran, pensions development manager at Scottish Widows, told FTAdviser they went from around 3 per cent in the first week - “which is no great surprise given the pent-up demand” - to 30 per cent by week five and then settling since then to between 26 and 30 per cent most weeks since.
“I think they should be doing more to promote Pension Wise,” he commented, adding that the numbers of people going to an adviser have also been “pretty small” so far.
However, he did point out that people do appear to be considering their options more, coming back for multiple calls and spending an average of an hour on the phone to the firm before making a decision.
“The number one choice is still cash, although we’ve now done thousands of direct to consumer drawdown requests, which was a surprise as we’d thought more people would choose partial encashments.”
Jamie Jenkins, head of pensions strategy at Standard Life, said that their figures have been a little bit higher than others, at between 25 to 33 per cent since the initial rush.
“I think many people are looking at our site before their session and then coming back for a chat, which is quite pleasing.”
LV also reported Pension Wise usage by its customers to be around 31 per cent.
Legal and General’s numbers followed the trend, but from a much higher initial level, going from 52 per cent having received guidance in May, to 47 per cent in June and 34 per cent in July.
“We think this is that May was high because of course customers had been holding back and then took action from April, now the position is more stable which we expect to continue and it is holiday time too,” commented a spokesperson.
Fidelity Worldwide Investment’s call centre statistics suggested that the number rose to 20 per cent in June, but in August only 11 per cent used the service before coming to them; a figure that is in line with May.
A statement from the firm did note that of those who had used the service, over 90 per cent felt they had been given enough guidance to make their own choices.
Richard Parkin, head of retirement at Fidelity Worldwide Investment, added: “Pension Wise take-up amongst our customers remains low but it’s pleasing to see that people who use it appear to find it useful.”
Last month the Treasury stated that more than 925,000 people have used the Pension Wise website, while nearly 18,000 free guidance appointments have been facilitated over the phone and face-to-face.