The cost of each Pension Wise appointment rose to £514 in December, while the number of appointments fell to 3,205, down from a high of 6,755 in October, according to the latest Government statistics.
While December is not necessarily a typical month for pension planning, demand appears to be declining and average costs are increasing. TPAS telephone appointments showing a steady decline since launch.
Over 383,000 investors accessed their pensions in first 6 months of pension freedoms – just 28,320 had a Pension Wise appointment over that period.
The Treasury has estimated that the funding cost of Pension Wise will be £35 million for the 2015/16 tax year.
Hargreaves Lansdown head of retirement policy Tom McPhail says: “The availability of impartial guidance is an important element of the pension freedoms. Pension Wise provides an excellent service and most people who do use it have a very positive experience, however overall usage numbers are still pretty low. Telephone appointments from TPAS have declined steadily to just a third of demand when it was first launched. Policymakers need to improve the take-up or to make sure suitable alternative solutions are in place. Any pension investor should be able to receive good quality guidance and support from their pension provider because this is where most of them turn to.”
“The latest data from HMRC and the FCA suggest that the initial bow-wave of pension freedom demand may now be receding, so perhaps in the next few months we’ll get a clearer sense of what ongoing investor activity may look like. Many of the initial transactions have been relatively small pots getting cashed out as a lump sum, which is not necessarily a bad thing.”