The Treasury is ceasing its oversight of government-backed guidance service, Pension Wise. The move, which will happen before the end of this financial year, will see the service transfer to the Department for Work and Pensions (DWP).
The site was launched in April this year in order to offer free guidance to those 55 and older after being given freedom to spend their defined contribution pension savings how they wish.
According to the site’s exit surveys, 90 per cent of customers reported they were satisfied or very satisfied following an appointment.
The announcement for the move was made by Harriet Baldwin MP, economic secretary to the Treasury, while giving evidence on the pension freedom guidance to the Work and Pensions Committee on 16 September. The session was held amid concerns people have been left susceptible to buying products unsuitable to their needs or becoming victims of mis-selling.
The Committee also admits there is currently little information available about Pension Wise, or the decisions individuals have been taking. The session’s goal was to further examine the approach by the regulators and government and to try to consider possible recommendations for change.
Alan Solomons, director of London-based Alpha Investments and Financial Planning, said Pension Wise is superficially a good idea. “People in general know little or nothing about pensions but behave as if they are simple. The issue is making the site more well known.
“Moving makes sense as the DWP presumably knows about pensions, one hopes. Ros Altmann may also add to the usefulness of this. However, the essential thing is for it to have more publicity so that people know it is there.”
Elsewhere, David Geale, director of policy at the FCA, told the Committee that the regulator may eventually consider using advisers to review Pension Wise in the future.
Currently, the appointments made with Pension Wise are 45 minutes long – either over the phone or face-to-face – with a “guidance specialist” and from there, personal guidance is given on what the retirees can do with their pension pot.