Automatic Pension Wise appointments needed for over-50s, says Just

Pension Wise appointments should be automatically booked for over-50s in order to help them understand their retirement options and avoid scams, according to Just Group.

The retirement specialist's call for action came as it released research which indicated that less than a fifth (18 per cent) of pension savers aged 55-59 who have taken cash from a defined contribution (DC) pension without advice were satisfied with the help they received.

The research also found that most half (49 per cent) of the age group believed they did not receive enough information and support, while only a third (33 per cent) of the older 60-64 year old age group were satisfied with the information they had about their options.

Just said that this lack of support raised serious concerns that people may not fully understand their options and may be more likely to fall prey to scammers.

Just Group communications director, Stephen Lowe, commented: “Early access to pension cash has been described by the financial regulator as ‘the new norm’ and the 55-59 age group dipping into funds early are most at risk of facing a shortfall later so it is important they receive the help they need.”

In light of the findings, Just Group again called for the Financial Conduct Authority (FCA) to automatically book Pension Wise appointments for people from the age of 50, in a move which the company said would echo automatically enrolling employees in workplace pensions.

Just Group has called for the change multiple times, including earlier in October after finding that the proportion of DC pension pots accessed without guidance or advice rose by 8 per cent in 2019/20.

Lowe said: “Pension Wise is very effective at helping people understand their options and beat scams, but too few are using it. While Pension Wise reports 94 per cent of users are satisfied with its service, industry figures show only about one in six accessing pensions each year are using the service.”

He continued: “The FCA now has a unique opportunity to ensure receiving free and impartial guidance becomes a new norm by setting an approach to ensure the majority gain from this valuable guidance rather than miss out on it.

“This would help a wide range of people and in particular would directly engage those with less knowledge or lower levels of financial capability who are most vulnerable to making poor decisions or falling for scams.

“People who feel they don’t need guidance, for example, because they were receiving regulated advice, could opt out. However, we believe that so many people who might not take guidance or advice now would do so if it were a normal step all pension savers take before accessing their pension for the first time.”

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