Wealth manager and platform Quilter says the ‘stronger nudge’ towards pensions guidance, introduced a year ago, has so far produced “lacklustre” results and needs to be beefed up.
This month is the one year anniversary since the introduction of the so-called “stronger nudge” to government-funded pensions guidance designed to boost the take up of Pension Wise guidance sessions by those accessing their pensions for the first time.
New data from the Money and Pensions Service (MAPS), analysed by Quilter, suggests a modest increase in take up in the first year.
MAPS figures show that the stronger nudge to pensions guidance has seen a 13% uptick in attendances of Pension Wise guidance sessions.
Since the stronger nudge was implemented on 1 June 2022, 105,271 appointments have been attended compared to the 92,911 attended during the same period a year earlier.
Over the same period there was a 21% increase in appointments arranged.
However, the figures show an increase in the proportion of no shows and cancellations, up from 25% to 30%.
Quilter says that while the figures are positive the increase in bookings and attendances may not be solely driven by the stronger nudge.
From August 2022 face to face appointments for customers where a telephone appointment was not suitable restarted, having been halted from March 2020 due to the Covid pandemic.
Quilter says the figures are placed into further context by Financial Conduct Authority data which show the total number of pension plans accessed for the first time in 2021/22 was over 700,000. Quilter says the proportion of individuals taking guidance when accessing their pension remains stubbornly low at around 16%.
Quilter said: “The impact of the stronger nudge therefore looks inconclusive at best.”
|
Month
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Appointments attended pre- Stronger Nudge*
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Appointments attended post Stronger Nudge**
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Percentage increase
|
|
Total
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92,911
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105,271
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13.3%
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*Same period a year earlier – June 2021-March 2022
**June 2022-March 2023
The introduction of the stronger nudge has also resulted in longer waiting times for appointments with some pension savers waiting more than a month for Pension Wise and scam guidance sessions.
Quilter says the figures suggest the “nudge” toward guidance should come much earlier and well before people consider when to access their savings.
Jon Greer, head of retirement policy at Quilter, said: “Guidance offers a valuable resource for those looking to go it alone when they access without advice and explain the different options available, but the stronger nudge has not provided the expected boost to the take-up of guidance sessions since its implementation a year ago.
“Our experience is that many customers looking to access their pension savings already have a good idea of the action they wish to take and often do not feel they need guidance, particularly where they have already received financial advice. However, it is worrying that so many people who do not seek advice still appear to be opting out and going ahead without support. Taking guidance at this stage in life is a long way from becoming normalised.
“While we support the stronger nudge to pensions guidance, it is clear that something needs to change in order to ensure more people get help in making what is ultimately one of the biggest financial decisions they will ever make. The limited use of such a valuable resource that has been clearly signposted suggests the stronger nudge comes too late in the process.
“People’s expectations should be managed much earlier by making it clear in wake-up packs provided to those from age 50 that not only should they seek guidance or advice, but they are expected to have sought guidance or advice before they access their pension savings. The message should also be reinforced through Pension Wise advertising until it becomes more widely known and normalised.”
