Tpas tells government to send financial healthcheck letters

Tpas tells government to send financial healthcheck letters

The Pensions Advisory Service (Tpas) has pushed for the government to send out financial healthcheck letters to increase uptake of guidance.

Michelle Cracknell, chief executive of Tpas, said guidance was vital, as her staff found that only a “tiny” proportion of people considering drawdown knew to mention investment in their enquiries.

She added: “What we are finding from the conversations on drawdown is that people have partially understood the drawdown concept by reading the financial pages in the weekend press.

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“But what they don’t understand is that they’re going to have to choose a fund to invest their money in, and the impact that market movements will have on the sustainability of those funds.”

She said pension freedoms had left pensioners, who were still in a “defined benefit mindset”, vulnerable to share market fluctuations and ongoing sequencing risk, something that she said was “way out of the scope of their understanding”.

“We see every day that people’s understanding of pensions is incredibly low,” Ms Cracknell stated.

The number of people using Tpas increased by 70 per cent in the past year to 177,000, a figure she said she was “very proud of” but was also “a fraction of what it should have been”.