Revamped wake-up packs ‘fail to boost’ pension freedom guidance numbers

Jenna Brown reports

Mandated changes to retirement wake-up packs introduced a year ago have so far failed to result in more retirees taking free guidance, according to provider Just Group.

Group communications director Stephen Lowe said analysis of Financial Conduct Authority (FCA) retirement income market data figures shows that both the number and proportion of people using the free, impartial and independent guidance service, Pension Wise, or regulated advice when taking pension cash has actually fallen since the ‘wake-up’ pack overhaul last November.

He pointed to FCA figures which showed in the six months between October 2019 and March 2020 the numbers using Pension Wise fell by 1% to 45,933 compared to October 2018 to March 2019, despite a 1% rise in the number accessing pensions for the first time.

Providers had update pre-retirement wake-up packs by November 1 2019, although some started earlier.

Lowe said: “Passive measures such as the signposting in ‘wake-up’ packs will at best only deliver marginal gains.

“Guidance is a key consumer protection against poor decisions and scams and it is important to put in

place measures that ensure the majority, not just a minority, receive that support.”

MPs are set to debate the Pension Schemes Bill this week. As part of that legislation guidance sessions with Pension Wise would automatically be booked for pension savers.

Just said it supported a more active approach to dramatically increase the use of guidance by pension savers to help them make good choices and beat scams.

FCA figures

Oct-Mar 2019 Oct-Mar 2020 Change
Total pots accessed for first time 316,985 317,213
Number using Pension Wise guidance 46,346 45,933 -1%
Number using regulated advice 117,826 110,315 -6%
Number accessing without guidance or regulated advice 152,813 160,965 +5%