Why three in four say they will shun guidance guarantee

The Pension Wise website went live last week – branded ‘Your money: your choice’ – with six steps for savers to decide how to turn their pension pot into retirement income, as the government tried to build a “reliable and trusted brand” ahead of the April flexibilities.

The Treasury had already demanded the closure of the recently launched marketing website called pensionwisechoices.co.uk after concerns it was passing itself off as the government service.

A survey conducted by financial advice company Portal Financial contacted 501 people earlier this month – including defined contribution, to defined benefit members and those unsure of their retirement provision.

Of the women surveyed, 78.4 per cent said they were not planning to use the Pension Wise service, while 75.1 per cent of men said the same.

Among women aged 59 and 60 – the typical retirement age – only 7.4 per cent said they would use the service.

Richard Butcher, managing director at professional trustee provider PTL, said the figures “really don’t look very good” for the government, but added: “It is fairly early days and they haven’t really done themselves any favours, very few have heard about it.”

He argued dropping the term ‘guidance guarantee’ from the service – much trailed in last year’s Budget – meant policymakers had lost “what little amount of goodwill they had started to build”.

Richard White, senior content and PR executive at Portal Financial, said: “A potential low take-up of the service is in keeping with other survey results... and could indicate that the government has not yet done enough to explain its purpose and benefits to the public.”

Lack of promotion

The government’s older workers champion Ros Altmann described the figures as unsurprising given the lack of promotion so far for the service, and called upon the government and the industry to promote it to savers.

She added: “Of course these findings also emphasise why it is so important that the Financial Conduct Authority ensures pension companies have a duty of care to ask customers questions and warn them of risks relevant to their pension decisions and help them avoid making unsuitable choices.”

A Treasury spokesperson said, in addition to the Pension Wise website, it was planning a nationwide marketing campaign to raise awareness and would require providers to signpost savers towards it.

“The government wants to make sure people have the information they need to make the most of the pensions freedoms ahead of April,” the spokesperson added.

The survey also suggested only one in four over-55 DC savers plan on taking a lump sum from their pension after April, suggesting there would not be an immediate total cashing-in of entitlements among this group.