“Stronger support” is needed for those approaching pension freedoms eligibility as nearly three-fifths (59 per cent) of people aged between 45 and 54 are confused by their choices at retirement, according to Just Group.

Research from the retirement specialist found that the proportion of confused individuals rose to nearly two-thirds (65 per cent) of women, while just 12 per cent of women were aware of the free guidance offered by the Pension Wise service compared to 20 per cent of men.

Only 28 per cent of the age group said they knew what they wanted to do with their pensions, with women again having less certainty than men as just 24 per cent agreed that they had a plan for their retirement savings.

Just said there was “overwhelming evidence” that more support was needed for the majority of those deciding how to get best value from their pension benefits, noting that some MPs had put forward proposals to automatically book Pension Wise appointments for people when they reached the age of 50.

Just group communications director, Stephen Lowe, said: “It seems common sense that the Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) should prioritise significantly increasing take up of a free service that is proven to help people understand their pension choices as well as avoiding scams and paying too much income tax.”

“The Pension Wise evaluation from the Money and Pensions Service tells us that these guidance sessions leave the vast majority of users better informed and more confident in their decision-making.

“However, the opt-in ‘nudge’ to encourage people to take up this guidance means these sessions will still only reach a minority of people approaching the age when they become eligible to access their pension benefits.”

Lowe added that the The Department for Work and Pensions’ recent ‘stronger nudge’ proposal “made clear that they want guidance to become ‘a normal part’ of the process”, which he noted would require a significant boost to the “meagre” 14 per cent of people who received Pension Wise guidance before accessing their pensions in the last year.

He concluded: “To make good on this promise, the FCA and TPR must have some tactics up their sleeve to transform usage to an accepted norm. Perhaps now will be a good time to trial automatic appointment booking into the Pension Wise guidance service.”

Just Group's call for change comes shortly after the Association of British Insurers endorsed a “fundamental rethink” of pension advice and guidance regulations after finding that almost three quarters (72 per cent) of consumers would not pay for it.

Share Story: