77% of people are not looking to take up Pension Wise guidance
In his 2014 Budget, the chancellor George Osborne pledged free guidance to people approaching retirement. It's now almost a year later and for most of that time, details have been thin. Recently, though, we have been told that the service will be called Pension Wise and know the list of locations where people can receive face-to-face guidance.
However, Pension Wise goes live in a matter of weeks and there's a risk of people not knowing enough about the service to utilise it. We conducted a survey of people aged 55 and above, and found that just 3% knew the guidance service is called Pension Wise - 43% thought it was The Pensions Advisory Service (which is an organisation that will help provide the guidance over the phone), 14% did not know about the service at all, and some people even thought it was the FCA.
Will Pension Wise make a difference?
When asked whether or not they intended to use Pension Wise in helping them plan for retirement, 77% of respondents said no. This result was similar for men and women, and we also looked at what people thought at the typical retirement age. For women that age is 60, and for men it is 65. Of the women aged 59 or 60, 93% did not want to use it, while 71% of men aged 64 or 65 did not intend to use it.
A potentially low uptake could be concerning, but so few people knowing details of the service indicates that a strong awareness campaign is needed. In explaining what the service is and how it will help people, there could be a much bigger interest as the pension freedoms get closer and become an option for people. It's also possible that the people on the cusp of retirement age have already sought advice or made plans for their retirement; the figures could therefore change as people become more aware of the service and incorporate it into their retirement planning.
Our survey found that neither income nor location had much impact on how people felt about the guidance service, as the following infographic shows. At 39%, people earning £70,000-£99,000 were the most receptive to Pension Wise.
Age does appear to be a factor, with interest in Pension Wise decreasing as people get older; 32% of people aged 55-59 said they intended to use the service, compared to just 16% of over 65s.
Pension Wise and financial advice
It is possible that some people have no interest in Pension Wise because they do not plan on removing any money from their pension, nor will retire for years. However, our survey asked people the type of pension they have and whether they intended to remove a lump sum from April. As can be seen in the infographic, almost a quarter of people with a defined contribution pension want to remove some money from April, as do 27% of people with a defined benefit pension and 33% of people with both schemes. If you'd like more information on taking a lump sum from your pension.
Pension Wise is no substitute for regulated advice, but will help people be aware of their options, which is essential for anyone to make an informed choice with their retirement decisions.
What do you think of Pension Wise? Let us know with a comment below.
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The details provided in this article are for general information only and are in no way deemed to be financial advice. All of the material is correct as of the publication date, but could be out-of-date by the time you read the article. For our latest information and news, please see our articles section: https://www.portafina.co.uk/whats-new
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