You are here

Ros Altmann told 'tit for tat arguments' won't improve Pension Wise take-up

The underwhelming take-up of Pension Wise has resulted in wide spread criticism of the service, most notably from former pensions minister Steve Webb

13 November 2015

Add comment

The pension minister's recent attack on pension providers, blaming them for the low take-up of the government's pension guidance service, Pension Wise, has been refuted by the managing director of Thomas Miller Investment.

'…blaming pension providers for the low take-up of Pension Wise is missing the point and seems to be wilfully blind to what many in the profession had highlighted before', said Matthew Phillips.

'To put it bluntly, Pensions Wise was rushed through, not thought out and not well planned. We have said that before and no one should be surprised at the poor take up'.

Ros Altmann said in an interview with Money Marketing that providers are prioritising driving people towards their own advice services, while only mentioning Pension Wise sparingly.

Pension providers reported in August 2015 that only 25 per cent of savers who contacted them about accessing their pension pots had used Pension Wise before calling them.

However Phillips believes that the implementation of Pension Wise was not appropriately thought through, and 'commercial businesses with shareholder responsibilities' cannot be expected to drive business away from themselves.

'To be clear, we want Pension Wise to work', he said.

'A better informed population is better for all of us. That said, the reason it is not working is a mixture of poor government planning, and providers who, let's remind ourselves, are commercial enterprises with shareholder responsibilities, having been left to pick up the slack.

'We all have to shoulder the burden of education of the population, and tit for tat arguments are not going to help. A bit of honesty, and dare I say humility, wouldn't have gone amiss here. What we really need, as we have said before, is clarity around pensions.'

Meanwhile former pensions minister, Steve Webb, has said that Pension Wise might not have been the best approach. He suggested that the money spent on the initiative could have been spent on vouchers which would give savers access to advice already available on the market.

Phillips however feels that the last thing the pension industry needs is further changes. He has advocated a period of consolidation so that savers and providers can acclimatise to the new landscape.

'Firstly, [we need] a commitment from government that they are going to leave pensions alone. Stop tinkering. Allow the providers, advisers and clients to get used to changes and plan properly.

'Secondly, government should take responsibility for providing clarity about what Pension Wise is, and possibly introduce some set wording that must appear at the top of communications from providers. It's not advice but good independent information.

'Finally, a plan that would encourage the greater take up of financial advice. We would hope that that is independent advice, and have suggested that raising the amount that fee-based advice can be paid for by the employer before it becomes a P11d would be one way to encourage people to have proper advice before they retire'.

He added: 'This is constructive. Simply blaming some of the largest stakeholders is not.'

Categorised in:

Tax & Wealth structuring Pensions