47% of eligible DC savers unaware of Pension Wise

Almost half (47 per cent) of pension savers entitled to use Pension Wise have never heard of it, according to Just Group’s analysis of the service’s 2019/20 evaluation.

The retirement specialist added that around 1 million defined contribution (DC) savers aged between 50 and 54 were likely to miss out on free guidance because they were unaware of the service.

As such, Just Group has urged the Financial Conduct Authority (FCA) to consider automatically booking savers in for guidance appointments in order to improve the service’s uptake.

Just group communications director, Stephen Lowe, commented: “We need the regulator to act quickly and decisively if hundreds of thousands more pension savers are not going to miss out on guidance and be more vulnerable to bad decisions and scams.”

He noted that the findings of the 2019/20 Pension Wise Service Evaluation mirrored Just Group research which had identified that over four-fifths (81 per cent) of 45 to 54 year olds with DC pensions did not know they were entitled to free guidance.

Figures released by the FCA earlier in October revealed that, of the 673,831 DC pensions accessed for the first time during 2019/20, over a third (36 per cent) were accessed with regulated advice, while only 14 per cent were accessed after free guidance from Pension Wise.

Lowe added: “People cannot use it if they have not heard about it so this lack of awareness among the exact group it aims to help is very worrying.

“The option to take cash from a DC pension at age 55 is widely known but the entitlement to guidance is clearly yet to sink in. That is a problem because as well as talking people through their pension options, the guidance also discusses how people can shop around for the best deals and avoid scams.”

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