Webb seeks to alleviate scheme guidance concerns

Some schemes and industry bodies have raised concerns about a lack of detail so far around how the guidance will be delivered and the cost of providing it. 

A survey last month by the National Association of Pension Funds found 78 per cent of its DC members said they were not clear what the government expects them to deliver and how much it will cost. 

“Our model, as the chancellor said, is as a scheme member you have the right to a face-to-face conversation,” said Webb at the Leadership of DC Pensions summit last week. “It’s not an obligation, we don’t make you sit down with somebody but we will enable you to do that if that is what you want.”

Many other people might get their information in other ways such as websites, helplines and via The Pensions Advisory Service, he said. “Clearly as a member of DC pension scheme you will have a right to the guarantee and the scheme will have to make sure you get it, but the scheme will not necessarily have to provide it,” Webb said.

Daniel Jacobson, pensions operations and policy manager at home improvements retailer Kingfisher, said it was waiting for the results of the consultation before it decides how it will be delivered to its nationwide workforce.

"In terms of our demographic, what we would provisionally look at doing is regular events [for employees to] receive that guidance in a group environment with the possibility of one-to-one meetings," said Jacobson.

Putting people straight into technology to educate them about a complex subject like pensions would make it a big challenge for them to engage, said Greg Thorley, director at the Life Academy, a service offering financial education.

He added group face-to-face guidance could be used initially, followed by phone and web-based communication. “Around the country there are conference centres or hotels or venues that have enough capacity to take people who could come along and spend one or two hours getting the first steps clear," Thorley said.

Webb told delegates TPAS demonstrated we have “an excellent infrastructure already in place”, which is independent, expert and has a growing number of people using the website.

“It seems to be inevitable that we’ll want websites, webchats, phone lines and all the rest of it as part of the infrastructure,” he added.

Good guidance is essential if savers are to understand their new options at retirement, but high quality advice will inevitably cost money, said Jim Bligh, head of public services reform at the CBI.

“However, there is a question mark over whether the best guidance will be affordable at a time when government is set to cap charges in defined contribution schemes,” Bligh said.