Introduction of the nudge to guidance should be welcomed but more needs to be done to close the guidance gap

by | Jun 1, 2022

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Jenny Holt, Managing Director, Customer Savings and Investments at Standard Life, part of Phoenix Group said: “From Wednesday 1 June all pensions providers and trustees must give customers a ‘stronger nudge’ to the government’s free Pension

“Wise guidance service when they decide to access their pension savings, or transfer a pension to anther provider for the purpose of accessing benefits. In practical terms this means providers will be required to offer to make an appointment on the customer’s behalf in addition to explaining the nature and purpose of this guidance.                     

“Just 14% of people accessing their defined contribution pension for the first time speak to Pension Wise, but with nearly 700,000 people accessing their pension for the first time each year, that means many do so without seeking support. The ambition to have a greater proportion of people accessing independent guidance should be welcomed, particularly when just 20% of 50-65 year olds have taken the more comprehensive and personalised option of speaking to a financial adviser.

 
 

“We are hopeful that customers will respond positively to being directed to Pension Wise. However, even more needs to be done if we are to help the majority to make better informed decisions, particularly when you bear in mind that many savers are using a range of assets in addition to their pension pots to fund their retirements. We would like to see further action taken to help put more tailored guidance in place and to enable our industry to play a greater role in closing the guidance gap.”

 

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