David Gauke, secretary of state for work and pensions, has repeated the mistake of his predecessors by calling the government’s guidance services an “advice body.”
Twice during his first speech since taking on his new role at the Department for Work & Pensions at the Association of British Insurers Long-term savings conference this morning (4 July) in London, Mr Gauke called the new guidance service set to be created by combining The Pension Advisory Service and Pension Wise an “advice body.”
In the March 2017 Budget the government announced the two guidance services would be merged to create a single pensions guidance body, which would also see the Money Advice Service scrapped.
Statistics published by the Financial Conduct Authority last week revealed the shockingly low take-up of government guidance services.
In the regulator’s 48-page Financial Advice Market Review Baseline report, the FCA stated of those aged over 55 plus and planning to retire in the next two years, less than half (44 per cent) had used at least one form of guidance or information.
However the FCA revealed only 10 per cent had used (Tpas) and only 7 per cent used Pension Wise.
During the question and answer session following his speech this afternoon, FTAdviser and Financial Adviser’s editor Emma Ann Hughes raised the fact Mr Gauke had wrongly described what the guidance services offered.
Mr Gauke acknowledged his mistake, pointed out he had been a regulatory lawyer and was aware of the importance of words and added he was aware of the difference between guidance and advice.
When asked how a single guidance body would be more successful than multiple ones, Mr Gauke said: “There isn’t a magic bullet of increasing number of people taking up guidance, but making sure people were aware of their existence is important.”
Michelle Cracknell, chief executive of TPAS, said there had been an increase in take-up of guidance services and she was convinced that more people would engage with the new body.
emma.hughes@ft.com
