Statistics published by the Financial Conduct Authority today (30 June) have 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 The Pension Advisory Service (TPAS) and only 7 per cent used Pension Wise.
In March 2017 the government announced that TPAS and Pension Wise would be merged to create a single pensions guidance body, so going forward the FCA stated it will track the use of the new government sponsored guidance.
The poor take-up of the government’s guidance services will outrage many in the industry who have had to pay for the running of these organisations for years now.
Back in April, advisers were told they faced a 4.7 per cent increase in their regulatory fees for 2017 to 2018.
The regulator wanted advisers in the A13 fee block to pay £77.1m to cover the costs of the FCA, Financial Ombudsman Service and guidance services in 2017 to 2018, compared with £73.7m in 2016 to 2017.
The total budget for the government’s other guidance scheme, the Money Advice Service, was £75m, which was the same as last year.
The Department for Work and Pensions stated the 2017 to 2018 funding requirement for providing Pension Wise would be £16.2m.
The most used sources of information and guidance were websites and other literature from banks, building societies, insurers and investment providers (10 per cent), private sector money advice websites (9 per cent) and the media or newspapers and their websites (9 per cent).