The government has spent £17.8m on advertising Pension Wise since 2014, minister for pensions and financial inclusion Guy Opperman revealed.
The amounts spent between 2015 and 2017 and the advertising budget for 2018, mean the figure is around £10m lower than the values invested in promoting auto-enrolment, according to data disclosed by Mr Opperman, in response to questions raised by Frank Field, chair of the Work and Pensions Committee.
In a letter to Mr Field, Mr Opperman said that demand for the guidance body services “has been very responsive to paid advertising, which encourages the target audience to book a telephone or face-to-face appointment or to visit the website”.
He said: “For example, immediately following the January 2017 TV campaign, the service experienced record levels of demand (appointment bookings and web visits) and delivered record numbers of appointments in both February and March.”
Pension Wise is a service set up in the wake of pension freedom rules to offer financial guidance, not regulated financial advice, to those looking to take money from their retirement pot from age 55, when this process involves a defined contribution (DC) scheme.
It is paid for by the financial services industry, which is also supposed to help direct people to it once they express an interest in withdrawing their pension.
Under current rules, only savers with a defined benefit (DB) pension pot higher than £30,000 must seek regulated financial advice.
The Financial Conduct Authority (FCA) revealed, in its Financial Advice Market Review Baseline report published in June, that only 7 per cent of those aged over 55 plus and planning to retire in the next two years had used Pension Wise.
The regulator is currently reviewing the effectiveness of the retirement wake-up packs, which are sent by providers to individuals six months prior to retirement age, to see whether there is more that can be done to encourage consumers to use the free guidance provided by Pension Wise.
Mr Opperman argued, however, that advertising of the guidance body is working.
He said: “The Pension Wise service evaluation full year findings showed that 29 per cent of appointment customers heard about the service from TV, radio or press advertising.
“This is the second biggest driver to the service after provider referrals (43 per cent).
“Advertising is a great way of reaching those people who are less engaged with their pension provider and pensions in general, many of whom would benefit from Pension Wise guidance.”
Since 2015, the government has spent around £24.7m in advertising auto-enrolment, which was introduced in 2012.
Mr Opperman said: “While the Pension Wise advertising campaign is comparable to the automatic enrolment campaign in terms of promotion of pensions as a product, it is important to point out that the potential eligible audience for the Pension Wise service is smaller, and the advertising budget reflects this.”
Auto-enrolment “affects all employers and employees aged 22 and over, and as such significant campaigns are required across a range of media channels to reach them with tailored messages,” he added.