The requirement for pension providers to guide consumers towards Pension Wise for advice does not come early enough, according to Royal London director of policy, Steve Webb.
His comment comes in response to a tweet from Financial Times pensions correspondent, Josephine Cumbo, which stated: “Less than half of people (46 per cent) who booked an appointment with Pension Wise did so because their pension provider suggested it, according to government figures out today.”
Webb tweeted in reply: “The problem is that the requirement to signpost to Pension Wise comes too late - consumers have usually made their mind up to access their cash by the time we point them to Pension Wise and often regard the signposting as putting barriers in their way.”
Industry figures have been calling for pension providers to do more in educating their customers about the existence and benefits of using Pension Wise.
Cumbo added: “This figure should be much higher as pension providers are a significant info point for customers.”
In response to Webb’s point, it was suggested that the Financial Conduct Authority (FCA) could take action to attempt to remedy the situation.
Just Group communications director, Stephen Lowe, tweeted in reply: “I think it’s likely the FCA will propose in their Retirement Outcomes Review response that people should be introduced to Pension Wise at age 50 and then at least annually to combat Webb's point.
“So then providers can get people to Pension Wise well before access to the pension benefits are available.”
When asked what is stopping providers from doing this now, Webb responded: “Nothing, and many do, but until recently it depended on people ringing up, so it was reactive.
“We’re now doing proactive communications five years out before people make their mind up.”
Despite the concerns, the same Pension Wise survey found that 92 per cent of its customers were satisfied with their experience, although this is down by 2 per cent from last year.
Furthermore, 97 per cent of customers said their understanding had improved a month after their appointment, while 92 per cent of customers feeling confident in their ability to avoid scams.